Forum Non Conveniens: 20m – euro claim Cypriot company vs. Reuters

It has been held that choice of jurisdiction and law clauses can not present an obstacle to protecting commercial representatives which exercise their activity within Member States; this protection is provided by a European Directive that has now been incorporated into Cypriot legislation.

The President of Nicosia District Court dismissed an application by Reuters’ which asked for the legal action filed against them by Cypriot company, Farmanet Holdings Ltd, in the Cypriot courts to be dismissed, alleging that it was in fact the American courts which had jurisdiction to try the dispute.

Reuters attempted to suspend the proceedings which had commenced in Cyprus and refer them to New York, by relying on a jurisdiction clause. The clause contained an agreement by the parties that in the event of any dispute the courts of New York would have the jurisdiction to try the matter.

Farmanet, via its lawyers Georgiades & Mylonas, filed an objection claiming that the Cyprus courts were the most appropriate place to try the dispute. The burden of proof lay with Farmanet as the defendant. The submissions put forward by Yiannos Georgiades referred to a case that had come before the European Court which contained similar circumstances and characteristics.

The court used the principles laid down in The Eleftheria (The All England Law Reports 1969 Vol 2 pp 641) and the principle of forum non conveniens. Regard must be had in particular, but without prejudice to; 1) the country in which evidence is situated or more readily available and the effect of that on the relative convenience and expense of trial as between the two jurisdictions; 2) whether the law of the foreign courts applies and the differences between the laws of the two jurisdictions; 3) the connection of the parties to the country and how close the connection is; 4) whether the defendants genuinely desire the trial in the jurisdiction or whether they are merely seeking procedural advantages and 5) whether the plaintiff would be unfairly prejudiced by having to sue in the foreign country. The court was satisfied that in this case the five principles above were relevant and present.

As a result the Cypriot court held, 8 November 2006, that it had been proven that the plaintiffs had adequate reasons which justified the continuation of the proceedings in Cyprus. The existence of the jurisdiction clause in the agreement did not weaken the reasons.

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