August 16, 2020

Federal court dismisses bribery-related case against Glencore on grounds of forum non conveniens

On July 31, 2020, the US District Court for the District of New Jersey dismissed a class action lawsuit against Glencore PLC, a Switzerland-based commodities and mining company, its CEO, Ivan Glassenberg, and its CFO, Steven Kalmin, on the grounds of forum non conveniens.

The class action was brought by a class of investors who alleged that they had lost money on investments in over-the-counter securities because Glencore made false statements and failed to disclose information concerning investigations by the US Department of Justice (DOJ) into alleged bribery and related conduct in the Democratic Republic of Congo, Venezuela, and Nigeria.  In February 2020, the defendants filed a motion to dismiss challenging personal jurisdiction, and arguing that it would be more appropriate to litigate the claims in Switzerland under the principle of forum non conveniens.

In its July 31 ruling dismissing the case, the Court set out several factors explaining its finding of forum non conveniens.  First, the Court explained that although a plaintiff’s choice of forum was generally entitled to significant deference, that was not the case here where the Court had found “no apparent connection to New Jersey” by either Glencore or the investors.  Second, the Court noted that most if not all of the allegedly fraudulent statements were made in Switzerland or the UK, and concerned alleged actions in other foreign countries, and most of the relevant witnesses and evidence were also located in foreign countries.  Third, the court noted that the defendants were willing to consent to jurisdiction in Switzerland, and had submitted expert opinions setting out the adequacy of Switzerland’s legal system to adjudicate the dispute.

Finally, although the court did not rule on plaintiffs’ personal jurisdiction arguments, it did note that where, as here, jurisdiction was based on American Depositary Receipts that were purportedly issued without the approval or participation of  Glencore, and which were purchased on an OTC market, the “issue of personal jurisdiction is not entirely clear.”

USNJ Opinion