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Corporate Governance

: The Harvard Law School Corporate Governance Blog

Forum Non Conveniens Defeats Shareholder Litigation on Cross-Border Mergers

By Harvard Law School Program on Corporate Governance

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Editor?s Note: This post comes to us from Todd Cosenza of Willkie Farr & Gallagher LLP, and is based on a Willkie Farr & Gallagher client memorandum by Mr. Cosenza and Tariq Mundiya.

Two recent U.S. federal district court decisions (In re Cadbury Shareholder Litig. and In re Alcon Shareholder Litig.) highlight how the common law doctrine of forum non conveniens can thwart class actions commenced by U.S. shareholders challenging cross-border merger transactions. Both decisions also reflect the trend of U.S. courts to refrain from adjudicating claims brought by U.S. shareholders impacting foreign sovereign interests and arising predominately under foreign laws. As the Alcon court noted, U.S. courts are increasingly attempting to ?avert the unnecessary globalization of this Court?s jurisdiction that would occur if the mere trading of stock on the NYSE would expose foreign businesses to corporate governance challenges in this Court.? [1]

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Full post as published by The Harvard Law School Corporate Governance Blog on July 25, 2010 (boomark / email).