Lisa, S.A. v. Juan Jose Gutierrez Mayorga, No. 2571-VCL (Del. Ch., June 22, 2009), read opinion here.
This Chancery Court decision involves a 1992 sale of shares in a group of family-owned corporations organized under the laws of Guatemala and El Salvador. The plaintiff is a Panamanian corporation. The defendants are a Panamanian corporation, a Barbados corporation and two Delaware corporations. Also named is a Guatemalan national and resident, who is an officer and director.
The court concluded that the Delaware courts lack personal jurisdiction over any of the defendants other than the Delaware entities. Moreover, the court concludes that a number of the counts in the complaint failed to state a claim upon which relief can be granted against either of those Delaware entities and that, in addition, all claims against them must be dismissed on grounds of forum non conveniens.
The court discusses the burden that the plaintiff must bear to show a basis for the court’s exercise of jurisdiction over non-resident defendants when a motion to dismiss is filed under Chancery Court Rule 12(b)(2). The court explained that in addition to showing some statutory basis for the assertion of jurisdiction over non-resident defendants, the plaintiff must additionally establish that the exercise of jurisdiction over the non-resident defendants comports with the requirements of the Due Process Clause of the Fourteenth Amendment to the United States Constitution.
In rejecting the request for jurisdictional discovery (see case citation at footnote 19), the court also explained why there was not a basis for jurisdiction under either the general long arm statute at Section 3104 of Title 10 of the Delaware Code, nor was there jurisdiction pursuant to Section 3114 of Title 10 of the Delaware Code that relates to jurisdiction over officers and directors of Delaware corporations.
This decision provides a helpful discussion of the statutory and public policy basis for imposing jurisdiction under Sections 3114 and 3104, and the court explains why neither of those statutes allow for the imposition of jurisdiction in this case and why therefore the motion to dismiss was granted.
Moreover, the court explained that: “where, as here, Delaware courts have jurisdiction over but a few of the interested parties, and there is a court in another jurisdiction capable of exercising jurisdiction over all of the interested parties, this court has dismissed the action for improper venue.” Parenthetically, the court considered testimony that the plaintiff did not want to use the courts in Guatemala based on alleged corruption in those courts. However, the court observed that the record only referred to alleged corruption in the criminal courts of Guatemala as opposed to the civil courts in that country. Nevertheless, the court concluded that based on forum non conveniens the court reasoned that the case should be dismissed.