Internet kills idea of an inconvenient place to defend your client: Judge

In the age of Zoom, the Ontario Superior Court of Justice has essentially found that it doesn’t really matter in which jurisdiction you defend your clients in an arbitration hearing — it’s all part of the common cyber landscape now.

Over many years, the courts have dealt with disputes concerning a legal principle known as forum non conveniens. This means a court has the discretion to dismiss an action in one jurisdiction that may be more appropriately – or more conveniently – heard in another court.

In Kore Meals LLC v. Freshii Development LLC, the Ontario Superior Court dealt with whether the principle is even relevant anymore in the internet age. Ultimately, Morgan found that the internet has torn down any barriers making one forum more convenient than any other.

“In the age of Zoom, is any forum more non conveniens [inconvenient] than another?” as Ontario Superior Court Justice Edward Morgan framed the issue in Kore Meals. “Has a venerable doctrine now gone the way of the VCR player or the action in assumpsit [i.e. a legal action for breach of an implied promise]?”

In Kore Meals, the defendant, Freshii Development LLC, a Chicago-based company, entered into a Development Agent Agreement (DAA) with the plaintiff, a Houston-based company, to develop Freshii franchises in Texas. Kore Meals claims breach of the DAA and unjust enrichment, the merits of which have not been adjudicated in court.

In Article 22A of the DAA, an arbitration clause requires that disputes between the parties be submitted for arbitration by the American Arbitration Association in the city where Freshii Development has its business address, which is identified as Chicago.

But based on evidence obtained through an investigator, Kore Meals argued before court that Freshii Development did not conduct business in Chicago; in fact, it had no presence in Chicago at all except for a postal box inside a UPS store.

Kore Meals found that Freshii Development’s parent company, Freshii Inc., is an Ontario corporation. For this reason, Kore Meals found the most appropriate place to conduct the arbitration would be Ontario.

Morgan disagreed, siding with Freshii in the case.

“If hearings are held by videoconference, documents filed in digital form, and witnesses examined from remote locations, what is left of any challenge based on the unfairness or impracticality of any given forum?” Morgan wrote in his decision. “To ask the question is to answer it. Freshii Developments may have a miniature post office box or an entire office tower in Chicago, and witnesses or documents may be located in Canada’s Northwest Territories or in the deep south of the United States, and no location would be any more or less convenient than another.”

With that, Morgan essentially kissed good-bye to a legal doctrine that has been traced back to Scotland as long ago as the 1880s.

“It is by now an obvious point, but it bears repeating that a digital-based adjudicative system with a videoconference hearing is as distant and as nearby as the World Wide Web. With this in mind, the considerable legal learning that has gone into contests of competing forums over the years is now all but obsolete.

“Judges cannot say forum non conveniens we hardly knew you, but they can now say farewell to what was until recently a familiar doctrinal presence in the courthouse.”

 

Feature photo courtesy of iStock.com/alexsl