【Case Study】

Sinochem International v.Malaysia International Shipping Corp.1

A contract between petitioner (Sinochem),a Chinese state-owned importer,and an American corporation not a party (Triorient) here provided that Sinochem would purchase steel coils and that Triorient would be paid under a letter of credit by producing a valid bill of lading certifying that the coils had been loaded for shipment to China on or before April 30,2003.Triorient subchartered a vessel owned by respondent (Malaysia International),a Malaysian company,to transport the coils,and hired a stevedoring company to load the coils in Philadelphia.A bill of lading,dated April 30,2003,triggered payment under the letter of credit.Sinochem petitioned Guangzhou admiralty court in China for preservation of a maritime claim against Malaysia International and arrest of the vessel,alleging that the Malaysian company had falsely backdated the bill of lading.The Chinese court ordered the ship arrested,and Sinochem timely filed a complaint in that tribunal.The Chinese admiralty court rejected Malaysia International’s jurisdictional objections to Sinochem’s complaint and that ruling was affirmed on appeal.

Shortly after the Chinese admiralty court ordered the vessel’s arrest,Malaysia International filed this action in a United States District Court,asserting that Sinochem’s preservation petition to the Chinese court contained misrepresentations,and seeking compensation for losses sustained due to the ship’s arrest.Sinochem moved to dismiss on several grounds,including lack of subject-matter and personal jurisdiction and the doctrine of forum non conveniens,under which a federal district court may dismiss an action if a court abroad is the more appropriate and convenient forum for adjudicating the controversy.(https://www.daowen.com)

The District Court determined it had subject-matter jurisdiction over the cause,concluded that it lacked personal jurisdiction over Sinochem under Pennsylvania law,conjectured that limited discovery might reveal that it had personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2),but dismissed on the forum non conveniens ground,finding that the case could be adjudicated adequately and more conveniently in the Chinese courts.Agreeing that there was subject-matter jurisdiction and that personal jurisdiction could not be resolved sans discovery,the Third Circuit panel held that the District Court could not dismiss the case under the forum non conveniens doctrine unless and until it determined definitively that it had both subject-matter and personal jurisdiction.

Sinochem International Co.,Ltd.v.Malaysia International Shipping Corporation,was a case decided by the United States Supreme Court,in which the Court held a United States district court has discretion to respond at once to a defendant’s forum non conveniens plea,and need not take up first any other threshold objection.In particular,a court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction or personal jurisdiction) over the defendant if it determines that,in any event,a foreign tribunal is the more suitable arbiter of the merits of the case.