Articles Posted in International Law

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A Cayman Islands investment fund and two of its Delaware subsidiaries (collectively “Gramercy”) sued a bank organized under Delaware law with offices in Illinois and Bulgaria (Bulgarian-American Enterprise Fund, or “Bulgarian-American”) and an Irish bank headquartered in Dublin (Allied Irish Banks, P.L.C., or “Allied”) over claims they admitted arose under Bulgarian law and had no connection to activity that took place in Delaware. Delaware was the second forum in which Gramercy sought to press its Bulgarian claims. The first forum was Illinois, where: (i) after extensive discovery and briefing on the issue of forum non conveniens, the Circuit Court of Cook County in Chicago granted a motion to dismiss; (ii) the Illinois Appellate Court unanimously affirmed the Circuit Court’s dismissal; and (iii) the Illinois Supreme Court denied Gramercy’s petition for leave to appeal. Rather than going to Bulgaria and suing in the forum whose laws governed its claims and where its investment in Bulgarian-American took place, Gramercy sued in Delaware. Bulgarian-American and Allied filed a motion to dismiss, arguing Bulgaria was the appropriate forum for the litigation. In granting Bulgarian-American and Allied’s motion and holding that Gramercy’s suit did not merit the overwhelming hardship standard afforded to first-filed actions under Cryo-Maid, the Delaware Court of Chancery was forced to address confusing arguments about this Court’s forum non conveniens precedent, in particular, the relationship among the Delaware Supreme Court’s longstanding decisions in “CryoMaid” and “McWane,” and a more recent decision, “Lisa, S.A. v. Mayorga.” Ultimately, the Delaware Supreme Court determined the Court of Chancery correctly held that because the Delaware action was not first filed, and that to obtain dismissal on forum non conveniens grounds, Bulgarian-American and Allied did not need to show overwhelming hardship. But, because the Illinois case was no longer pending, and was not dismissed on the merits like the first-filed action in Lisa, McWane was no longer the proper focus for the Court of Chancery’s analysis. The Illinois action had relevance in the forum non conveniens analysis because it meant that analysis would not be tilted in Gramercy’s favor under the overwhelming hardship standard. But, because the Illinois action was not dismissed on its merits, but instead for forum non conveniens, it should not have shifted the Court’s focus from Cryo-Maid to McWane. Between Cryo-Maid’s overwhelming hardship standard and McWane’s discretionary standard lies an intermediate analysis that applies to situations like Gramercy’s: a straightforward assessment of the CryoMaid factors, where dismissal is appropriate if those factors weigh in favor of that outcome. View "Gramercy Emerging Markets Fund, et al. v. Allied Irish Banks, P.L.C., et al." on Justia Law

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Sagarra, a Spanish corporation, was a minority shareholder of Uniland, also a Spanish corporation. Sagarra brought a Court of Chancery action to rescind the sale, by CPV, of Giant, to Uniland. CPV was the controlling stockholder of both Giant and Uniland. Sagarra purported to sue derivatively on behalf of a wholly-owned Delaware subsidiary of Uniland, UAC, which was specifically created as the vehicle to acquire Giant. Defendants moved to dismiss the complaint on the ground that Sagarra lacked standing to enforce a claim on behalf of UAC. The Court of Chancery held that Sagarra's standing to sue was governed by Spanish law, because Uniland - the only entity in which Sagarra owned stock - was incorporated in Spain. The court upheld the Court of Chancery's reasoning and judgment because Sagarra failed to satisfy the demand requirements of Spanish law. View "Sagarra Inversiones, S.L., v. Cementos Portland Valderrivas, S.A., et al." on Justia Law