Comity, Forum Non Conveniens and the National Bank of Greece

Klonis v. National Bank of Greece, S.A.
2006 WL 3851146 (S.D.N.Y. Dec. 27, 2006).

Comity and forum non conveniens were the primary issues in this case. Plaintiffs Nicholas and Mary Klonis sued the National Bank of Greece for failure to pay the principal and interest due on three accounts that the couple opened with the National Mortgage Bank of Greece in the 1980s. Two of the accounts were opened in New York; the other was opened in Athens. Defendants moved to dismiss the count relating to the Athens account for lack of personal jurisdiction. Defendants also sought dismissal of the entire action on international comity grounds, and for forum non conveniens. The court declined to rule on the former motion, but addressed the latter two.

The court denied the defendant’s motion to dismiss under the doctrine of comity. It reasoned that parallel litigation may proceed in the United States and another country without creating a conflict, at least until the entry of judgment in one forum results in collateral estoppel in the other. In the meantime, the court held that the mere presence of concurrent litigation does not supersede the district court’s nearly absolute obligation to exercise the jurisdiction that it retains. The court indicated that, in order to win dismissal on international comity grounds, there must be some exceptional circumstance justifying that outcome, and none was present here. The court also denied the defendants’ alternative request for a stay pending the outcome of the litigation in Greek courts.

The court also denied the defendants’ motion to dismiss on forum non conveniens grounds. The Second Circuit uses a three part test to determine whether such a dismissal is appropriate. The court described the test as follows:

First, the court must determine the degree of deference that plaintiffs' choice of forum deserves. Next, it must determine whether the proposed alternative forum constitutes an adequate forum for the resolution of the claims. Finally, assuming that the alternative forum is adequate, the court must weigh the relevant private and public interest factors and determine whether the plaintiffs' chosen forum or the proposed alternative is, in fact, the more convenient and appropriate forum.

Regarding the first part of the test, the court restated the familiar axiom that the plaintiff’s choice of forum is generally entitled to strong deference. To determine the appropriate degree of deference in this particular case, the court looked for evidence of forum shopping and found little. It also concluded that litigating the matter in New York would be as convenient or nearly as convenient to the parties as doing so in Greece. Regarding the second prong, the court found that Greece was an appropriate alternative forum. However, turning to the third part of the test, the court determined that practical considerations weighed in favor of litigating in New York. Specifically, the court determined that the hardship to the plaintiffs from conducting the litigation in Greece would be substantial, while the defendants would not endure similar hardship as a result of litigating in the United States.

Overall, the outcome is not particularly surprising. U.S. courts tend both to exercise jurisdiction despite the existence of parallel foreign litigation and to deny motions to dismiss on forum non conveniens grounds absent compelling reasons to grant them.