Cyprus court dismisses action for breach of contract in Greece, citing lack of forum conveniens doctrine.

[*285] 1986 January 18

(ARTEMIS, S.D.J.)

IN THE DISTRICT COURT OF LIMASSOL

Aristos Spyrou,

Plaintiff,

v.

Michael Hadjioannou,

Defendant.

(Action No. 3079/81).

Jurisdiction - Forum conveniens - Relevant doctrine not part of the Private International Law of Cyprus.

Jurisdiction - Discretion to refuse its exercise - Breach of a contract, formed in Greece and to be performed in Saudi Arabia, committed out of the jurisdiction - Defendant’s witnesses residing in Greece - Discretion exercised in favour of the defendant - Action dismissed, not stayed.

R. Michaelides, for the Applicant

Cnr. Tsivitanidou (Miss) for Gl. Talianos, for the Respondent.

RULING

The following ruling was delivered by:

ARTEMIS, S.D.J.: This is an application by the Applicant-Defendant for an order of the Court “staying or stopping or striking out the proceedings and/or suspending the proceedings and/or withdrawing its jurisdiction” and for an order of declaration that the District Court of Limassol is not the “forum conveniens”.

By another ruling the Court has

already decided that it has jurisdiction to try the present case, [*286] therefore, by the present application the Court is asked to

deny exercising its jurisdiction in the present action on the ground that Cyprus is not the “forum conveniens” for trying this case and as such, trial will be prejudicial and oppressive to the defendant. The allegation is that the cause of action wholly arose in Greece and most of the witnesses for the defendant reside in Greece.

The leading Cyprus case on the matter is that of Stella v. Sayias (1983) 1 C.L.R. p. 186. As regards the question of “forum conveniens” the following was said at p. 196 of that judgment:

“In Jadranska Slobodna Plovidba v. Photos Photiades & Co. (1965) 1 C.L.R. 58, at p.70 our Supreme Court referred to the

aspect of ‘forum conveniens’ without however deciding whether such doctrine is

acceptable in our Private International Law. In the recent case of Charles Guendjian v. Societe Tunisienne de Banque, S.A. (C.A. 5120, the judgment in which was delivered on 22.2.1983 and

is not yet reported) our Supreme Court after making reference to the above case, does not appear to have treated, unlike the position in Scotland and in the U.S.A., the doctrine of ‘forum conveniens’ as forming part of the Cypriot Private International Law.” [*287]

The Court having thereafter made it clear that it is vested with a discretion to refuse the exercise of jurisdiction in a proper case, proceeded to analyse the circumstances in which such discretion may be exercised and held that there is inherent jurisdiction to stay an action brought within the jurisdiction in respect of a cause of action which arose out of the jurisdiction, if it is satisfied that no injustice will be done thereby to the plaintiff and that the defendant would be subject to such injustice in defending the action as would amount to vexation and oppression to which he should not be subjected if he were sued in another accessible court where the cause of action arose. In doing so the Court cited with approval the cases of Norton’s Settlement v. Norton (1908) 1 Ch. 471, Logan v. Bank of Scotland (No.2) (1906) 1 K.B. 141, Atlantic Star (1973) 2 ALL E.R. 175, (1974) A.C. 436, St. Pierre v. South American Stores (Gath & Chaves), Ltd. (1936) 1 K.B.D. 382, MacShannon v. Rockware Glass Ltd. (1978) 1 ALL E.R. 625, Gastanho v. Brown & Root (U.K.) Ltd. (1981) 1 ALL E.R. 143, etc.

On the question of the inconvenience that might be caused if the Court accepted jurisdiction, Lord Diplock had the following to say in his judgment in the case of MacShannon v. Rockware Glass Ltd. (H.L.) (E.)) at p. 367: [*288]

“… it would, in my view, be wrong to confine this to the convenience of the parties themselves. Witnesses, too, who are required to play a part essential to the administration of justice, are entitled to consideration, and so is disruption caused to others by the absence from their place of work of witnesses required to be present at the court of trial.”

With the above authorities in mind I shall now proceed to examine the circumstances of the present case so as to be able to decide how my discretion should be exercised in the matter.

The claim is in respect of a breach of contract of service and there is also a counterclaim on behalf of the defendant which is directly related to such contract of service.

Careful examination of the pleadings and the affidavits in this case, shows clearly that the contract was formed in Greece and was to be performed in Saudi-Arabia and the alleged breach of such contract was not committed in Cyprus.

It is therefore quite obvious that the cause of action did not arise in Cyprus and the whole contract and its breach have no relation with Cyprus, except the fact that the parties are Cypriots.

It is in evidence before me by affidavit, that the defendant in this case intends to call witnesses from Greece and allege that, as there is no procedure [*289] to ensure their presence, continuation of the proceedings in Cyprus will cause him grave injustice. The plaintiff, of course, denies the necessity of these witnesses, but I am of the view that it is for the defendant himself to decide who are necessary witnesses for his case. In addition, the connection of the contract with Greece as a result of its conclusion there, makes it more probable than not that any witnesses must be in Greece.

Learned counsel for the plaintiff submitted to the Court that it is at a very late stage that the defendant applies for the present order, something he could have done much earlier, and therefore his application should be dismissed.

It is a fact, that considerable delay (even though a similar application was filed earlier and withdrawn) has been manifested by the defendant, but I am of the view that this should not be the real consideration in exercising my discretion, as what is material for the Court to ensure is that no injustice is caused to the defendant.

Any question of delay which may have caused expenses to the other party can be remedied by the order for costs.

Besides, the objection of the defendant to the continuation of the proceedings is not connected with a mere irregularity but it is substantial and material and it affects the administration of justice [*290] directly, as it is alleged that continuation of the proceedings will cause great injustice to the defendant.

Bearing the above in mind, not only can I not exclude the possibility of that injustice, but I can also see the great probability that the defendant will be unable to defend properly if he has no means to ensure the presence of necessary witnesses.

As a result I am satisfied that this is a case which could have been tried with much less hardship to the parties in Greece, and if continuation of the proceedings here is allowed, it is very probable that irreparable damage and injustice may be caused to the defendant.

In addition to the above, there is an affidavit by Mr. F. Apostolides in which it is stated that the law of Greece which will most probably govern the contract is quite different from that of Cyprus. It is a fact, that Mr. Apostolides may not qualify as an expert in Greek law, but that would be material if he were called to testify on what the Greek law is. In the circumstances, I do not find him disqualified from merely stating that the law is different, and if it is so, the necessity to prove the Greek law will cause more expenses if the case is heard in Cyprus.

In the light of all the above, I consider that this is a proper case where my discretion should be exercised in favour of the defendant. I should like [*291] to point out at this stage that in reaching this conclusion I have also considered the fact that an issue already decided is before the Supreme Court on appeal and whether such conclusion here would take out of the jurisdiction of the Supreme Court the issue appealed from which might not be proper. Such thing however will not happen as the matter before the Supreme Court concerns merely an appeal from an order as to costs.

The question that has to be decided now is whether the proper course would be to stay proceedings or dismiss the action.

In the case of Stella v. Sayias (supra), Savvides J., in delivering the judgment of the court had this to say on the matter at p. 209:

Before concluding we wish to add that in examining the various cases referred to in this judgment, we have noticed that in the majority of them the order made by the Court was one for stay of the proceedings, whereas in the present case the Court made an order dismissing the action. It has not been raised by this appeal and has not been argued as to whether the proper order in the circumstances should have been one of staying the proceedings, or dismissing the action.

In Egbert v. Short (supra) Warrington J. in granting the application, had this to say at page 214: [*292]

‘In my judgment there is no

reason for staying the action. It is true that the action was stayed in Logan v. Bank of Scotland (No.2) but for the reason which I have pointed out in the course of the

argument, namely, that the application there was made on behalf only of certain defendants. The proper order will be to dismiss the action and order the defendant’s costs to be paid out of the fund which has been paid into Court as security for costs, and the balance of the fund to be paid to the plaintiff’.

“We are inclined to agree with the above dictum but we leave the matter open to be decided when such issue may properly be raised before this Court.”

In the light of the aforesaid and bearing in mind the dicta of Warrington J. (supra), I have decided to dismiss the action instead of staying the proceedings.

Bearing also in mind the close connection of the counterclaim with the claim, the latter should have the same fate. In the circumstances, both claim and counterclaim are dismissed.

As regards costs, two considerations are foremost in my mind. Firstly, the order of costs should be such as to take into account that a lot of expenses were caused because of the defendant’s delay in applying and pursuing to the end an application [*293] of this kind and, secondly, it must always be borne in mind that it was the plaintiff who initially disregarded the clear connection of the claim with Greece and not Cyprus by bringing the action here.

In view of this, I find the proper order to be one of not awarding costs and I consequently make no order as to costs; where specific orders for costs have already been made, they shall remain valid.

Action dismissed.