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ZHONG LUN SUCCESSFULLY REPRESENTED SUNTECH BY REVERSING A RULING ON JURISDICTION ON GROUND OF FORUM NON CONVENIENS
15 July 2016
On 12 June 2016, the High People’s Court of Shanghai, China (“High Court”) reversed a jurisdictional ruling rendered by the lower court against Suntech Power Holding Co., Ltd (incorporated in Cayman Islands, “SPH”). SPH initiated the court proceeding against Suntech Power Investment Pte. Ltd (incorporated in Singapore) concerning a commercial loan dispute in the lower court where the claim was dismissed on ground of forum non conveniens. On behalf of SPH, Zhong Lun (China) appealed to the High Court and obtained a ruling in favor of SPH.The appeal focused on the principle of forum non conveniens. The lower court held that foreign courts should be more appropriate forum for this case given that major obligations concerning the loan were performed abroad by the parties. Zhong Lun established its case by arguing that the parties in this case are typical off-shore companies that actually operate business in China, so they shall be distinguished from other foreign companies; in addition, the court shall take into consideration the possibility of enforcing a court judgment when determining if a foreign court is a more appropriate forum in this case: due to the lack of bilateral and multilateral treaties on legal assistance between Chinese and foreign governments, it is likely that a judgment rendered by a foreign court may not be enforceable in China where the major assets of the defendant is located. Based on Zhong Lun’s groundbreaking arguments, the High Court reversed the lower court’s decision and ruled that PRC court should have jurisdiction over this case.