Forum shopping: strategy or abuse?

Marlen Estevez Sanz
Roca Junyent, SLP, Madrid
m.estevez@rocajunyent.com

Forum shopping: A strategic tool in international litigation 

One of the most important strategic choices in international commercial dispute resolution is choosing the right forum. This choice is not made at random; rather, it is determined by a few variables that have a big impact on how a case turns out. Forum shopping enables plaintiffs to look for jurisdictions with favourable legislation, more predictable enforcement procedures, or procedural advantages. 

First, jurisdictional advantage is an important factor in the choice of forum, since the substantive law and legal interpretations made in Court may be beneficial to one of the parties, not only in legal but also in commercial terms. Likewise, the importance of procedural law plays an important role, for example, in the burden of proof. For instance, U.S. courts have comprehensive discovery procedures that may favour claimants, while English courts are renowned for their contract-friendly jurisprudence.

Second, the costs of the litigation can be decisive in respect of the choice of forum.

Third, the enforcement of judgments or decisions is another consideration that companies take into account when assessing which forum is most favourable to their interests. If a favourable decision cannot be enforced internationally, it is not very useful. By streamlining enforcement procedures, the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments may reduce the motivation for forum shopping based only on enforceability issues.

Finally, efficiency is particularly important, as companies are looking for speedy legal processes that offer guarantees of a quick resolution with the least delay possible to their operations. According to the World Bank's 2020 Ease of Doing Business Report,[1] Singapore and Hong Kong are among the fastest jurisdictions for resolving business disputes, making them desirable locations for litigation. 

Ethical concerns and regulatory efforts 

Indeed, forum shopping allows the parties to optimise their legal and economic interests and strategies. However, it is not all advantages: the fairness and integrity of the dispute resolution process may be compromised, undermining the predictability and reliability of legal outcomes and leading to potential abuses by one party over the other.

In this context, one might view a party's selection of forum as merely a purchasing choice provided by the legal system. However, this can undermine the legal system's true purpose, which is to provide a forum that is suitable for the specific circumstances of the case. This compromises the principle of legal predictability, as parties may make decisions based primarily on convenience or tactical advantage rather than on a genuine link to the dispute.

Another ethical issue related to forum shopping is judicial congestion. Popular jurisdictions that attract a high volume of international commercial disputes, such as London, New York, or Singapore, may experience significant backlogs of cases as a result. These delays not only harm the parties involved but can also undermine the efficiency and integrity of the judicial system. 

However, congestion is not solely a matter of case volume; the duration of proceedings also plays a crucial role. In jurisdictions other jurisdictions such as Italy or Cyprus, litigation can stretch on for years, prompting many litigants to turn to arbitration as a more efficient alternative. This highlights how forum shopping is often driven not just by the perceived fairness of a legal system, but also by practical considerations such as speed and efficiency in dispute resolution.
In response to these ethical challenges, regulatory measures have been introduced in some jurisdictions to prevent forum shopping abuses. One example is the Brussels I (Recast) Regulation (EU Regulation No. 1215/2012), which imposes restrictions on excessive forum selection within the European Union. This regulation aims to curb the practice of choosing a jurisdiction solely based on convenience by reinforcing the principle of jurisdiction based on the defendant’s location and the place where the dispute has a significant connection. 

A significant case in this context is the Owusu v. Jackson (2005) decision by the European Court of Justice.[2] The Court ruled that EU member state courts are bound to exercise jurisdiction over cases falling within their boundaries, even when another jurisdiction may be better suited for the dispute. This decision effectively limits the discretion of national courts to dismiss cases based on the forum non conveniens doctrine, which in English law is understood as follows:

'According to the doctrine of forum non conveniens, as understood in English law, a national court may decline to exercise jurisdiction on the ground that a court in another State, which also has jurisdiction, would objectively be a more appropriate forum for the trial of the action, that is to say, a forum in which the case may be tried more suitably for the interests of all the parties and the ends of justice.'

The significance of local jurisdictional principles was reaffirmed by the Owusu v Jackson verdict, which rejected the idea of dismissing cases simply for the convenience of another forum. In order to increase legal consistency and predictability within the European Union, this judgment sought to put an end to the deliberate manipulation of jurisdictional selection, a ruling that proved to be a real lesson in forum shopping, which has been followed by many others from European jurisdictions.[3]

These regulatory responses reflect growing concern over the ethical implications of forum shopping. As courts and legislators continue to grapple with these issues, there is a drive to provide more fair, open, and predictable rules for choosing forums.

Emerging trends 

As a consequence of such jurisdictional strategies and the clear disadvantages that can arise from an excessive and unjustified use of choice of forum, there is now a growing general interest in striking a balance between the demand for justice, legal certainty and the restriction of abusive practices that can create inequalities between the parties in conflict. The expansion of international business courts, the influence of international treaties, and the growing popularity of arbitration as a substitute for litigation are some of the major trends.

But how is this practice changing, and what factors are shaping its future?

One of the most significant and important developments is the rise of specialised international commercial courts. In response to the complexity of cross-border litigation, jurisdictions such as the Netherlands, Singapore or Dubai have established courts specially designed to handle complex, high-value disputes involving multinational corporations, financial transactions, intellectual property, and commercial contracts, where jurisdictional neutrality and enforcement mechanisms are crucial. 

For instance, the Netherlands Commercial Court (NCC)[4] allows proceedings in English and offers expedited case management, a model that other jurisdictions are also adopting to enhance their appeal. Similarly, the Singapore International Commercial Court (SICC) has attracted parties worldwide by allowing foreign judges and flexible procedures, and the Dubai International Financial Centre Courts (DIFC) have positioned themselves as a global hub for dispute resolution. 

These courts primarily reflect a broader trend where jurisdictions compete to offer businesses a more predictable and internationally oriented legal framework. As competition among commercial courts increases, businesses now have more options, reducing the unpredictability traditionally associated with national court litigation.

Yet, the question remains: is forum shopping still an advantage in an increasingly standardised global legal framework? The enforceability of judgments has long been a key factor in selecting a jurisdiction, as a favourable ruling is meaningless if it cannot be executed in another country. This is precisely why the 2019 Hague Judgments Convention is so significant. By establishing clear rules for the recognition and enforcement of foreign judgments, it aims to reduce the need for strategic forum selection based on enforcement concerns. If widely adopted, it could discourage forum shopping for enforcement-friendly jurisdictions, shifting the focus toward the substantive merits of each case rather than procedural tactics.

Conclusion

Forum shopping remains pertinent in the landscape of international dispute resolution, despite an evolving regulatory framework aimed at curbing its more opportunistic aspects. However, it is increasingly clear that courts and regulators are working to ensure that jurisdictional choices are grounded in valid legal principles rather than solely in tactical advantage. 

The future promises a more structured, transparent, and predictable process for forum selection, as evidenced by the rise of international commercial courts, the harmonization of enforcement procedures, and the growing prominence of arbitration. While forum shopping is likely to persist, its trajectory suggests a shift toward a more balanced approach—one that prioritizes efficiency and legal fairness, thereby fostering a more equitable environment for resolving international commercial disputes.

[1] The 'Enforcing Contracts' indicator in the World Bank’s Ease of Doing Business Report measures the time, cost, and procedural complexity involved in resolving a commercial dispute through a court system. It evaluates factors such as the number of procedures, the time taken and the cost to enforce a contract in a given jurisdiction.
[2] Owusu v Jackson [2005] ECR I-01383, Case C-281/02.
[3] Vedanta Resources PLC and another v Lungowe and others [2019] UKSC 20.
[4] Netherlands Commercial Court | Dutch judiciary [https://www.rechtspraak.nl/English/NCC/Pages/default.aspx]