Media McKasson & Klein


California Trumps India in Property Dispute; Court Rules California Is “Convenient Forum” & Proper Venue Despite Property Located in India

Parties in the U.S. are often unsure how to proceed when dealing with litigation claims that involve international law issues. While these issues can certainly be complicated (such as with an international property dispute), having experience with different legal regimes around the world can be helpful.

The Firm (through Neil Klein) successfully argued that a U.S. Federal Court in Central California was the proper place to litigate a breach of real property contract case, even though the real property was located in India, the contract was signed by the parties’ representatives in India, an Indian lawyer formalized the contract in India, and the parties agreed the contract was governed by Indian law.

Plaintiff was a Texas resident. While on a trip to his native hometown of Coimbatore, India, he saw a parcel of real estate for sale and decided to purchase it as an investment. He contacted the owner (Defendant), an Indian-born resident who happened to reside in California. After lengthy negotiations, they agreed on price, a sizeable deposit and payment terms. Their “Power Agents” executed the contract in India, and the buyer paid his deposit, but the seller refused to close escrow and transfer the property. For good measure, he kept the buyer’s deposit. Predictably, during this time, the property virtually doubled in value.

After the Firm filed suit on behalf of the buyer against the seller in the U.S. District Court for the Eastern District of California (seller’s residence), the seller tried to get the case moved to India – where it would have taken about 10-years to get to trial: He first filed a motion to dismiss the case for improper venue, arguing India was a better venue; this was defeated. [Read Reported Decision] He then filed a motion under the common-law doctrine of forum non conveniens (inconvenient forum), arguing the case should be dismissed in the U.S., since the property, the witnesses and the evidence was all in India (and the buyer could simply re-file in India. This motion too was defeated; of course, it would have been disastrous for the buyer, who had already invested a considerable amount of time and money in filing the case and appointing lawyers. [Read Reported Decision]

The case involved full briefing on applicable Indian law (the Firm worked with Indian lawyers and Senior Counsel). At oral argument, the Firm was able to convince the judge that there were significant U.S. ties/interests to the litigation: some negotiation took place in the U.S.; key witnesses were either in the U.S. or had pledged to travel to the U.S. if necessary, and that litigating the case in India would be more expensive than keeping it in California; and both parties resided in the U.S.

Shortly after the Court’s rulings, the seller had no choice but to quickly settle with the buyer, taking into account the greatly increased value of the real estate! See published decisions under case no. 1:06-cv-01030-OWW-TAG; citations: 2006 WL 2884794 and 2007 WL 1219281.