Complaint Dismissed On Forum Non Conveniens Grounds Because New York Did Not Have A Substantial Nexus To The Alleged Fraud

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Posted on: Jul 21 2025

Forum non conveniens is a common law doctrine in which a court may dismiss an action where another forum would be better suited to adjudicate the matter.[1]

In New York, the doctrine is codified in CPLR 327(a). Under this section, a court may “stay or dismiss [an] action in whole or in part on any conditions that may be just” if it finds that “in the interest of substantial justice the action should be heard in another forum.”[2] The doctrine reflects the basic principle that the “courts need not entertain causes of action lacking a substantial nexus with New York.”[3] The party seeking dismissal bears a heavy burden of establishing that New York is not the proper forum for the action.[4]

In considering a forum non conveniens motion, New York courts consider a number of factors, including the burden on New York courts, the potential hardship to the defendant, the unavailability of an alternative forum, whether both parties are nonresidents, whether the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction, the location of potential witnesses and documents, and the potential applicability of foreign law.[5] No one factor is controlling.[6] Nonetheless, where the foregoing factors establish that New York is an inconvenient forum, “[f]orum non conveniens relief should be granted.”[7]

On July 14, 2025, Justice Margaret Chan of the New York Supreme Court, Commercial Division, issued a decision and order in Korea Inv. & Sec. Co., Ltd. v Seabury Capital Group LLC, 2025 N.Y. Slip Op. 51098(U) (Sup. Ct., N.Y. County July 14, 2025) (here), dismissing plaintiffs’ complaint on forum non conveniens grounds. As discussed below, the court found that “all of the key misrepresentations and transactional details and logistics perpetuating defendants’ [alleged] fraud occurred in Singapore, Hong Kong, and/or Korea.”

Background

In or around May 2019, Seokwon Jang (“Jang”), a resident of South Korea acting in his capacity as a director for RiverTweed Co., Ltd. (“RiverTweed”), a company incorporated in South Korea with its principal place of business in Seoul, approached Arumdree Asset Management Co., Ltd. (“Arumdree”) about a multinational investment project involving certain trade receivables held by Agritrade International Pte Ltd. (“AIPL”), a Singaporean commodities company (the “Project”). Jang’s outreach resulted in Arumdree visiting Singapore to explore the Project.

While in Singapore, Arumdree met with Robert C. M. Lin (“Lin”), a United States national, who at the time was residing and working in Hong Kong. Lin served as the President and Chief Executive Officer (“CEO”) of (1) Seabury Trade Finance Exchange LLC (“Seabury Trade”), a holding company organized under the laws of Delaware and a wholly owned subsidiary of the New York-based Seabury Capital LLC (“Seabury Capital”), and (2) Seabury TFX (HK) Limited (“Seabury Hong Kong”), a Hong Kong-based operating company in which Seabury Trade holds an interest. Lin invited Arumdree to AIPL’s office to meet with AIPL’s representatives and customers. It was during the visit that Lin, Jang, and AIPL’s then-Chief Operating Officer (“COO”), Fong Nang Seng (“Fong”), allegedly represented to Arumdree that the Project would be a great investment opportunity with Lin in charge of managing any such investment.

Following Arumdree’s visit, Jang sent Arumdree AIPL’s 2018 Consolidated Financial Statements, which indicated that AIPL had more than $113 million in net assets as of 2018 and would be able to pay its debts when due. Jang later forwarded an email from Lin attaching 70 documents that related to AIPL’s past transactions with another purported customer.

On May 21, 2019, and June 20, 2019, respectively, plaintiff subscribed to the following two notes offered by Seabury Trade Capital SPC (“SPC”), a Cayman Island-based segregated portfolio company: (1) the Series 2019-2 USD 20,000,000 Secured Fixed Rate Notes due 2020 (the “SPC2 Note”), and (2) the Series 2019-3 USD 19,540,000 Secured Fixed Rate Note due 2020 (the “SPC3 Note”, and together with the SPC2 Note, the “Notes”). Concurrent with the Notes, plaintiff executed a corresponding subscription agreement on behalf of Arumdree AI Private Investment Trust No. 7 and Arumdree AI Private Investment Trust No. 9 (the “Trust Fund”) (the “Subscription Agreement”). The Subscription Agreement, and “any non-contractual obligations arising out of or in connection with” the agreement, was governed by English law.

The Project was structured as follows: (1) plaintiff would transfer $39,540,000 of the Trust Fund’s money to SPC; (2) using a platform hosted by Seabury Hong Kong, SPC would use the proceeds from the Notes to purchase AIPL’s trade receivables (the “Purchased Receivables”), which would then entitle SPC to payments from certain AIPL customers (the “Approved Debtors”); (3) Seabury Hong Kong would manage the Purchased Receivables by requesting and reviewing necessary documents from AIPL and the Approved Debtors; and (4) on or before the Notes’ maturity dates, SPC would pay back the Trust Fund the full purchase price of the Notes, with interest.

As a purported protection for any investment in the Project, AIPL’s then-CEO, Ng Xinwei (“Ng”), guaranteed payment, on demand, of the full amount of all obligations or indebtedness owed from AIPL. The Project was also allegedly backed by certain trade credit policies insuring the Purchased Receivables. The policies were underwritten by Hong Kong-based insurance companies, with SPC listed as the “loss payee”.

In the initial months following plaintiff’s subscription to the Notes, there was no indication of an issue with AIPL and, by all accounts, the Trust Fund’s investment was proceeding as originally contemplated. That allegedly changed on January 16, 2020, when AIPL applied for a moratorium under Section 211B of Singapore’s Companies Act. Soon after, AIPL was placed under judicial management at the request of creditors, with Ernst & Young LLP (“E&Y”) appointed as judicial manager.

On August 7, 2020, E&Y filed its judicial manager report with the Singapore High Court. The report identified numerous irregularities and conflicts of interest underlying AIPL’s business and accounting practices. The report also revealed that AIPL had been experiencing severe liquidity problems for years and had been attempting to procure loans from banks and other financial institutions using forged documents and false information. According to plaintiff, the Project was an extension of AIPL’s alleged fraud because it was able to use the ill-gotten gains from the Trust Fund to pay off its mounting debts and/or shield its wrongdoing. Subsequent criminal investigations into AIPL and its executives seemingly corroborated and expanded upon this alleged revelation of fraudulent conduct.

AIPL was ultimately wound up by court order on September 21, 2020. Three years later, on August 17, 2023, Arumdree emailed Lin to inquire about (1) the measures being taken against the Approved Debtors to recover the Purchased Receivables, and (2) the lack of proceedings against AIPL and the Approved Debtors for fraudulent conspiracy. Lin responded on August 25, 2023, stating that, outside of demand notices served on the Approved Debtors, no other actions were taken against them. Lin further represented that there were no plans to commence proceedings against AIPL or the Approved Debtors. Two months later, on October 16, 2023, Arumdree instructed Seabury to withdraw and return the remaining funds in SPC’s account. On December 19, 2023, Seabury transferred to the Trust Fund $43,644.05 from the SPC2 Note’s account and $316,409.941 from the SPC3 Note’s account.

According to plaintiff, the Project was the product of a scheme to defraud, which defendants carried out through an intricate web of connections and cross-directorships. As alleged, Lin and Jang were in constant communication with Fong while attempting to solicit the Trust Fund’s investment in the Project. Plaintiff alleged that these three individuals discussed specific terms of the Project, such as deal structure, interest rates, insurance policies, payment dates, and the amount of the notes to be sold.

In addition to these individuals, plaintiff alleged that Margaret L. Chan (“Chan”) – a California resident based out of Los Angeles who is the President and COO of Seabury Capital, a board member of various affiliates of the New York-based Seabury Capital Group LLC (“Seabury Group”) and its subsidiary Seabury Capital, a Vice-Chairman of Seabury Hong Kong, and a director of SPC – was “actively involved” in structuring the Project and gave directions regarding its funding. Plaintiff noted that RiverTweed and Seabridge Trade, a Singapore-incorporated company, were paid a commission from Seabury Hong Kong for arranging the Project.

Plaintiff commenced the action on June 21, 2024, asserting claims under New York law for conspiracy to commit fraud, fraudulent inducement, fraudulent misrepresentation, and breach of fiduciary duty. Both the Seabury defendants and RiverTweed defendants moved to dismiss the complaint primarily on the basis of forum non conveniens. In support, defendants contended that every factor of the forum non conveniens analysis favored dismissal: (1) the transactions alleged in the complaint all occurred abroad and largely involved foreign parties; (2) New York lacked an interest in the action given that Singapore was the epicenter of AIPL’s alleged fraud; (3) key documents and essential witnesses were located outside of New York and outside of the court’s subpoena power; and (4) Singapore was an adequate alternative forum to New York that is fully capable of resolving plaintiff’s claims.

Plaintiff opposed the motions. To start, plaintiff maintained that New York had the strongest nexus to the case because New York was the “control tower” of the alleged fraudulent scheme, meaning that it was “likely” that key witnesses and documentary evidence would be located in New York. Plaintiff also contended that defendants failed to identify an adequate alternative forum because litigating this case in Singapore or Korea would result in piecemeal litigation, and there was no guarantee that a Singaporean or Korean court would exercise jurisdiction over all defendants. Plaintiff maintained that defendants would not suffer any hardship by litigating in New York because they were either financial companies or corporate officers with ample resources to bring witnesses to New York. Plaintiff concluded by arguing that, because the alleged fraud involved New York companies, New York had an interest in adjudicating the dispute.

The Court’s Decision

The court granted the motions.

The court found that “each of the forum non conveniens factors weigh[ed] in favor of dismissal.”[8]”To start,” said the court, “nearly all of [the] parties in this action are located outside of New York, with most located outside the United States.”[9] The court noted that plaintiff was a Korean trustee of certain private equity funds regulated by Korean law and “the vast majority of defendants [were] based in South Korea, California, Hong Kong, the Cayman Islands, and/or Singapore.”[10] “This readily apparent pervasiveness of foreign residents,” concluded the court was “‘entitled to … substantial weight’” and “plainly militate[d] in favor of dismissal of th[e] action.”[11]

The court rejected plaintiff’s argument that because “three of the named defendants [were] purportedly based in New York”, New York was the proper forum.[12] The court found that, as alleged, “none of [these defendants] appear to have played a meaningful role in the alleged fraudulent scheme.”[13]

“Further supporting dismissal on forum non conveniens ground,” concluded the court, was “the fact that the scheme alleged in the Complaint occurred primarily in foreign jurisdictions.”[14] The court noted that “[a]ccording to the Complaint, defendants conspired to induce plaintiff to subscribe to the Notes without disclosing the dire financial condition of … AIPL and the fraudulent nature of the Project…. Yet, as alleged, none of the key aspects of the Project or defendants’ fraudulent scheme took place in New York.”[15]

The court rejected plaintiff’s contention that New York was the “control tower” for the alleged fraudulent scheme.[16] The court found plaintiff’s allegations to be conclusory and insufficient to “establish the requisite nexus to New York necessary to survive forum non conveniens dismissal.”[17]

“As a consequence of [the] strong foreign nexus,” said the court, “it is likely that the majority of material witnesses, relevant documents, and other evidence in support of plaintiff’s claims and defendants’ defenses are located outside of the United States.”[18] “For instance,” explained the court, “all of the key misrepresentations and transactional details and logistics perpetuating defendants’ fraud occurred in Singapore, Hong Kong, and/or Korea. And many of the relevant details regarding the fraud perpetrated by AIPL and defendants were only revealed from documents disclosed during court proceedings and criminal investigations that took place in Singapore.”[19] For these reasons, said the court, “the bulk of relevant documentary evidence will be located in Singapore and Hong Kong, and [the] key witnesses will be also located in those countries (and thus outside of the court’s subpoena power). “Consequently,” explained the court, “even assuming, as plaintiff argue[d], some witnesses or documents may be in New York, litigating th[e] action would almost certainly impose substantial burdens on defendants and nonparty witnesses so as to decidedly tip the scales in favor of dismissal.”[20]

“Finally,” said the court, “although New York law does not require that the parties … identify an adequate alternative forum to support forum non conveniens dismissal, such a forum exists in Singapore and further support[ed] dismissal of the case.”[21] The court explained that “many of the claims in the Complaint directly flow[ed] from conduct and transactions that originated out of Singapore.”[22] Though plaintiff expressed doubt that a Singaporean court could exercise personal jurisdiction over all defendants, the court held that the nexus emanating from plaintiff’s claims to Singapore was strong and could not be overcome by speculation.[23]

Moreover, observed the court, the fact that the Singaporean legal system is primarily derived from the English system and incorporates English common law further supported the conclusion that Singapore was an adequate alternative forum for the dispute.[24] “Because case law in New York suggests that [the] type of language used in the Subscription Agreement’s choice-of-law provision is generally to be construed broadly to reach tort claims,” the court concluded that “all of plaintiff’s claims should be governed by English law and not, as asserted, New York law.”[25] Therefore, said the court, “a court in Singapore would be more than capable of overseeing the parties’ dispute given its familiarity with English common law and the English legal system.”[26]

Takeaway

Korea Inv. & Sec. reaffirms the principle that the burden on plaintiffs to withstand a motion to dismiss on forum non conveniens grounds is high. Plaintiffs must demonstrate a substantial connection or nexus to New York sufficient to overcome a forum non conveniens motion. Vague or conclusory allegations that New York is the “hub”, “nerve center”, or the “control tower” of the wrongful misconduct will not suffice. Plaintiffs must come forward with facts and evidence demonstrating a substantial nexus to the state. Korea Inv. & Sec. shows that even if some defendants are based in, or have ties to, New York, that alone is insufficient to overcome a forum non conveniens challenge if the facts and circumstances are substantially centered elsewhere.

Korea Inv. & Sec. also underscores the importance of witness location, document availability, and the burden on courts and parties. If these factors favor a foreign jurisdiction, New York courts are more likely to dismiss an action in favor of the more convenient forum.

Finally, Korea Inv. & Sec. shows that a forum selection clause can play an important role in the court’s consideration of the factors necessary to decide a forum non conveniens motion. In Korea Inv. & Sec., the forum selection clause at issue evinced an intention by the parties to have their disputes (in contract and tort) governed by English law. As such, a court in Singapore was more than capable of managing the parties’ dispute given its familiarity with English common law and the English legal system. As noted by the court in Korea Inv. & Sec., New York courts regularly dismiss actions that may require the interpretation of foreign laws, especially where, as in Korea Inv. & Sec., a more convenient forum exists, and dismissal would avoid an “inordinate burden upon New York’s courts.”[27]

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] This Blog has examined the forum non conveniens doctrine, here, here, and here.

[2] CPLR 327(a); National Bank & Trust Co. of N. Am. v. Banco De Vizcaya, 72 N.Y.2d 1005, 1007 (1988).

[3] See Martin v. Mieth, 35 N.Y.2d 414, 418 (1974).

[4] Bank Hapoalim (Switzerland) Ltd. v. Banca Intesa S.p.A., 26 A.D.3d 286, 287 (1st Dept. 2006).

[5] Id. See also Fekah v. Baker Hughes Inc., 176 A.D.3d 527, 529 (1st Dept. 2019).

[6] Bank Hapoalim, 26 A.D.3d at 287.

[7] Silver v. Great Am. Ins. Co., 29 N.Y.2d 356, 361 (1972).

[8] Slip Op. at *5.

[9] Id.

[10] Id.

[11] Id. (quoting Wyser-Pratte Mgt. Co., Inc. v. Babcock Borsig AG., 23 A.D.3d 269, 270 (1st Dept. 2005)).

[12] Id.

[13] Id. (citations omitted).

[14] Id.

[15] Id. at *5-*6 (record citations omitted). For example, the Notes were offered by a Cayman Island issuer, SPC. Id. at *6. Key meetings took place in Singapore and involved individuals from Korea, Singapore, and Hong Kong. Id. The terms and structure of the Project occurred between alleged co-conspirators who reside in Korea, Hong Kong, Singapore, and California. Finally, plaintiff only learned about defendants’ alleged fraudulent scheme because it came to light through bankruptcy proceedings and a criminal investigation in Singapore. Id. “Taken together,” said the court, “these allegations establish that this case has no meaningful connection to New York. Rather, plaintiff’s claims exhibit a ‘strong foreign nexus’ that is ‘largely attributable to plaintiff’s sophisticated business dealings abroad.’” Id. (citing Wyser-Pratt Mgt., 23 A.D.3d at 270).

[16] Id.

[17] Id. (citations omitted).

[18] Id. at *7.

[19] Id.

[20] Id. (citations omitted).

[21] Id. (citation omitted).

[22] Id.

[23] Id. at *7-*8 (citations omitted).

[24] Id. at *8.

[25] Id. (citations omitted).

[26] Id. (citations omitted).

[27] Tilleke & Gibbins Intl., Ltd. v. Baker & McKenzie, 302 A.D.2d 328, 329 (1st Dept. 2003).

Tagged with: Business Litigation, Civil Practice Law and Rules, Commercial Litigation, Complex Litigation, Fraud