The Delaware Court of Chancery in Pipal Tech Ventures Private Limited v. MoEngage, Inc., C.A. No. 10381-VCG (Del. Ch. Dec. 17, 2015), applies the overwhelming hardship standard to deny a motion to dismiss based on a forum non conveniens argument even when the location of most of the events, witnesses and applicable law support the litigation taking place in a forum in India.
The key facts of the case involved an alleged theft of intellectual property by persons resident in India and subject to employment contracts governed by Indian law. Those employment agreements require disputes regarding those contracts to be litigated exclusively in the courts of the country of India. Nonetheless, the defendant corporation, which allegedly “possessed” the purloined intellectual property, was a Delaware corporation. The individuals resident in India who allegedly stole the software at issue were not subject to Delaware jurisdiction but pursuant to both the Hague Convention and Indian law, were subject to compulsory process so that their depositions could be compelled.
The court applied the six factors recited in the Delaware Supreme Court case of General Foods Corp. v. Cryo-Maid, Inc. Those factors include the relative ease of access to proof. Although in light of modern technology this factor is not as meaningful, this factor still supported the defendant’s motion to dismiss in light of virtually all the documentary and deposition evidence being in India. The fact that compulsory process is available in India favored the plaintiff, however.
The overwhelming hardship factor is a high threshold but not an impossible standard to meet. Notably, the mere fact that the law of a foreign country needs to be applied and relevant documents need to be translated and foreign law experts need to be retained at trial, does not, per se, satisfy the overwhelming hardship standard especially where, as in this case, the law of that foreign country on the issue at hand is well settled. The recent Delaware Supreme Court case in Martinez, by contrast, held that where there is a novel issue of another sovereign, that issue might be best determined by the courts of that sovereign country.
One final takeaway from this case that supported the reasoning of the court in denying the motion to dismiss was the public policy that Delaware has a powerful interest in preventing Delaware entities from being used a vehicles for fraud. The legitimacy of Delaware as a chartering jurisdiction depends on it. The allegations that the persons alleged to have stolen the trade secrets involved in this case, allegedly used a Delaware entity to do so, supported the selection by the plaintiff of Delaware as a forum in which to litigate the matter. See footnote 95.