Del Istmo Assurance Corp. v. Meletios Platon and Italkitchen Int’l, Case No. 11-61599-CIV-COHN/SELTZER (S.D. Fla. 2011), addresses the interesting and important issue in international practice of the choice of forum considerations applicable when one sovereign nation passes statutes attempting to block or regulate what disputes can be resolved in its courts based on what other nations do with respect to similar cases in their courts.  For a general discussion of blocking statutes in the jurisdiction and discovery contexts, see our e-book, International Practice: Topics and Trends.

The plaintiff in Del Istmo is a non-U.S. corporation organized under the laws of Panama.  The defendants are Florida corporations.  The claims in the suit arise out of alleged misappropriation of funds placed in trust to secure the payment for kitchens, leaving plaintiff with the obligation of paying on bonds that it had to execute.

The Court analyzed the case principally under the doctrine of forum non conveniens.  Even though the defendants were Florida corporations, and the plaintiff came to Florida from Panama to sue, the Court gave the plaintiff’s choice of forum little deference and was prepared to dismiss the case on forum non conveniens grounds if it found that Panama was an adequate and available forum.  In claiming that its own jurisdiction, the plaintiff relied on the fact that the remedies available in Panama were not as favorable as those in the U.S. under Florida law.  This the Court rejected on the basis of settled law.

The plaintiff also relied on a Panama blocking statute, which provided:

For any legal proceeding under this Chapter [Panamanian]  judges are not competent (to hear the case) if the complaint or the action being commenced in [Panama] has been previously dismissed or denied by a foreign judge under the application of forum non conveniens. In these cases, judges should dismiss or not recognize the complaint or demand on grounds of constitutional or preemptive jurisdiction.

The Court observed that a prior Florida state court case had been dismissed on forum non conveniens grounds in favor of Panama, only to have the Panama court refuse to hear the matter on the basis of this blocking statute, and when the plaintiff in that earlier case returned to Florida the Florida appellate court dismissed it again, ruling:

the case plainly belongs in Panama” and United States’ “courts cannot be compelled by other countries’ courts and lawmakers to resolve cases that should be determined in those countries. . . . If the foreign country chooses to turn away its citizen’s lawsuit for damages suffered in that very country,” there was no reason for United States’ resources to be devoted to hearing the matter.

The federal district court in Del Istmo did not go that far.  It did, however, dismiss the suit on the condition that the plaintiff be permitted to reinstate its suit if the Panama court would not hear the plaintiff’s claims there.