FILED
NOT FOR PUBLICATION MAR 25 2022
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT
OF THE NINTH CIRCUIT
In re: BAP No. WW-21-1176-BSG
ORLAND LTD.; VANDEVCO LIMITED, WW-21-1200-BSG
Debtors. (Related Appeals)
CERNER MIDDLE EAST LIMITED, Bk. No. 20-42710-MJH
Appellant,
v. Adv. Nos. 20-04077-MJH
BELBADI ENTERPRISES, LLC; ORLAND 20-04001-MJH
LTD.; VANDEVCO LIMITED,
Appellees. MEMORANDUM∗
Appeal from the United States Bankruptcy Court
for the Western District of Washington
Mary Jo Heston, Bankruptcy Judge, Presiding
Before: BRAND, SPRAKER, and GAN, Bankruptcy Judges.
INTRODUCTION
Plaintiff and creditor Cerner Middle East Limited ("Cerner") appeals
orders dismissing related adversary proceedings on forum non conveniens
grounds. The bankruptcy court ruled that the United Arab Emirates ("UAE")
∗ This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value,
see 9th Cir. BAP Rule 8024-1.
1
was an adequate alternative forum and that the balance of private and public
interest factors weighed in favor of dismissal. Seeing no abuse of discretion by
the bankruptcy court, we AFFIRM.1
FACTS
A. Prepetition events
Cerner is a Cayman Island company with its principal place of business in
Kansas City, Missouri. Cerner is a subsidiary of Cerner Corporation, a medical
services technology company, and operates in the Middle East and Africa. The
defendants are entities owned or controlled by Mr. Almed Saeed Al Badi Al
Dhaheri. Mr. Dhaheri is a citizen and domiciliary of the UAE and is the sole
member of defendant Belbadi Enterprises, LLC ("Belbadi LLC"), a UAE limited
liability company with its principal place of business in Abu Dhabi, UAE.
Belbadi LLC is the sole member of Belbadi Engineering, LLC, a UAE limited
liability company. Willamette Enterprises, Ltd. ("Willamette") is an exempted
Cayman Island company co-owned by Belbadi Engineering, LLC (99%) and Mr.
Ziad A. Elhindi (1%). Willamette is the holding company for debtor-defendant
Vandevco Limited ("Vandevco") and debtor-defendant Orland Ltd. ("Orland").
1
On February 25, 2022, after oral argument, Cerner filed what it contends is a Notice
of Supplemental Authorities under Rule 8014(f). The materials submitted by Cerner are not
an appropriate use of the rule. Cerner's notice offers no new authorities, but rather seeks to
supplement the record with new evidence of a recently-filed examiner's report, various
declarations, and deposition transcripts. Rule 8014(f), which is virtually identical to Fed. R.
App. P. 28(j), "permits a party to bring new authorities to the attention of the court; it is not
designed to bring new evidence through the back door." Manley v. Rowley, 847 F.3d 705, 710
n.2 (9th Cir. 2017) (quoting Trans-Sterling, Inc. v. Bible, 804 F.2d 525, 528 (9th Cir. 1986)
(emphasis in original)). Accordingly, we decline to consider Cerner's February 25 filing. For
the same reason, we also decline to consider the response from Vandevco Limited and
2
Vandevco is a Washington corporation which owns, through other entities, the
Vancouver Center, a mixed residential commercial development in Vancouver,
Washington. Orland is an Oregon corporation and was formed for the purpose
of real estate ownership and development. Orland owns some acreage and
rental homes in Tigard, Oregon.
In 2008, the UAE Ministry of Health awarded iCapital S/E ("iCapital")—a
sole proprietorship owned by Mr. Dhaheri—a contract to develop medical
information software for use by hospitals in the UAE. Cerner entered into a $94
million contract with iCapital wherein Cerner would provide hardware,
software, and related services for the UAE project.
After iCapital defaulted on its payment obligations under the contract,
Cerner commenced its first arbitration proceeding against iCapital and Mr.
Dhaheri in Paris, France. Before an answer was filed, Cerner and iCapital
executed a settlement agreement. In connection with the settlement, Belbadi
LLC, a stranger to the parties' contract, executed two agreements to guarantee
the obligations of iCapital (the "Guarantees"). The Guarantees were drafted in
both English and Arabic by Cerner's attorneys in the UAE. Two provisions from
the Guarantees are relevant here:
Section 1(g)(ii): The Guarantor (Belbadi LLC) authorizes the
Beneficiary (Cerner) without notice of demand and without
affecting Guarantor's liability hereunder, from time to time to:
take and hold security for the payment of this Guarantee or the
Guaranteed Obligations, and exchange, enforce, waive or release
any such security or any part thereof, and apply such security and
Orland Ltd. filed on March 21, 2022.
3
direct the order or manner of sale thereof as the Beneficiary in its
sole and absolute discretion may determine.
...
Section 7(b): Governing Law; Jurisdiction.
(i) This Guarantee shall be governed by, and construed and
enforced in accordance with, the laws of the Emirate of Abu
Dhabi and the federal laws of the United Arab Emirates,
without giving effect to the conflict of law rules thereof.
(ii) Each party hereby expressly consents to the jurisdiction of a
competent court in the Emirate of Abu Dhabi for the
adjudication of any dispute relating to, or arising under, this
Guarantee.2
When iCapital defaulted on the settlement agreement, Cerner filed a
second arbitration proceeding against iCapital and Mr. Dhaheri in Paris, France.
Cerner was awarded approximately $62 million (U.S. dollars) jointly and
severally against iCapital and Mr. Dhaheri. Cerner has received nothing under
the arbitration award or the Guarantees.
In 2016, Cerner filed two complaints in the United States to enforce the
Guarantees: one against Vandevco and Belbadi LLC in the Washington state
court (the "Washington Litigation"); the other against Orland and Belbadi LLC
in the Oregon state court (the "Oregon Litigation"). The complaints were similar
with respect to the underlying facts and allegations and both sought entry of a
judgment against Belbadi LLC for the amounts owing under the Guarantees
and attachment of the Vandevco and Orland shares as security for payment. In
The Arabic version of the Guarantees provided for "exclusive" jurisdiction in the
2
UAE, while the English version provided only for a consent to UAE jurisdiction. In any case,
4
short, Cerner alleged that Belbadi LLC breached the Guarantees and that
Vandevco and Orland, as the alter egos of Belbadi LLC, were equally liable for
the debt. Through a prejudgment writ of attachment, Cerner sought to enforce
its right to "take and hold" Belbadi LLC's beneficial ownership interest in the
Vandevco and Orland shares, which are owned by Willamette and held in the
Cayman Islands.
Four years elapsed between the filing of the state court complaints and
Vandevco and Orland's chapter 113 filings and the removal of the Washington
Litigation and the Oregon Litigation to the bankruptcy court. During that time,
Cerner, Belbadi LLC, Vandevco, and Orland litigated matters in the two state
courts, the district courts for the District of Oregon and the Western District of
Washington, the Ninth Circuit Court of Appeals, and the Oregon Court of
Appeals. Despite the vast amount of litigation, things never progressed past the
jurisdictional stage in either case.
The crux of the parties' unresolved dispute in both cases was whether the
state court had personal jurisdiction over Belbadi LLC. In the Washington
Litigation, Cerner argued that the state court had personal jurisdiction over
Belbadi LLC on the theory of quasi in rem jurisdiction due to its investments in
the Vancouver Center, and because Vandevco was Belbadi LLC's alter ego. The
Washington state court ordered an evidentiary hearing for Cerner to establish
the quasi in rem jurisdiction and alter ego issues. Cerner began but was unable to
at minimum, Cerner consented to the UAE courts to resolve any dispute over the Guarantees.
3 Unless specified otherwise, all chapter and section references are to the Bankruptcy
Code, 11 U.S.C. §§ 101-1532, and all "Rule" references are to the Federal Rules of Bankruptcy
5
conclude that hearing due to Vandevco's bankruptcy filing. In the Oregon
Litigation, the Oregon Court of Appeals held that the trial court had personal
jurisdiction over Belbadi LLC to the extent that it and Orland were alter egos.
However, nothing progressed at the trial court on remand due to Orland's
chapter 11 filing three weeks later.
There has also been litigation in the UAE. Cerner prevailed against
Belbadi LLC in at least one civil action where Belbadi LLC challenged the
Guarantees on various grounds, including claims that the statute of limitations
had expired and that they were not enforceable under UAE law. The UAE trial
court dismissed the suit on the merits and ordered Belbadi LLC to pay Cerner's
attorney's fees and costs. The UAE appellate court affirmed that decision.
B. The bankruptcy filings, removals of the state court litigation, and
motions to dismiss for forum non conveniens.
On December 6, 2020, Vandevco and Orland each filed a chapter 11
bankruptcy case in the Western District of Washington. The cases were later
ordered jointly administered. Cerner filed an $87,875,514.65 unsecured proof of
claim in each case. The supporting documents to Cerner's claims alleged that
Vandevco and Orland were directly liable to Cerner because they were the alter
egos of Belbadi LLC. Vandevco and Orland objected to the claims.
After Vandevco, Orland, and Belbadi LLC (collectively, "Defendants")
removed both the Washington Litigation and the Oregon Litigation to the
bankruptcy court (together, the "Adversary Proceedings"), Cerner moved for
remand. The bankruptcy court denied remand, finding that it would be more
Procedure.
6
efficient for Cerner's claims to be litigated in the bankruptcy court, which had
jurisdiction to administer Cerner's claims and exclusive control over the
debtors' assets. Cerner did not appeal the remand orders.
Defendants then moved to dismiss the Adversary Proceedings on forum
non conveniens grounds.4 They argued that Cerner's claims against Belbadi
LLC for breach of the Guarantees were wholly separate contractual claims from
its alter ego claims against Vandevco and Orland. Defendants argued that
dismissing the Adversary Proceedings would have no impact on Cerner's
ability to advance its claims against Vandevco or Orland, and would not
prejudice Cerner's rights to pursue Belbadi LLC in the UAE. If Cerner was
successful in its "outside reverse veil piercing" claim and established an alter
ego relationship between Belbadi LLC and Vandevco or Orland, argued
Defendants, Cerner's claim would be treated under the debtors' proposed plan
of reorganization.
Defendants argued that a UAE court could fairly adjudicate the contract
dispute between Cerner and Belbadi LLC and was the better forum because:
(1) the Guarantees were drafted, executed, and performed in the UAE and were
subject to UAE law; (2) the dispute related solely to events that occurred in the
UAE; (3) the parties consented to UAE jurisdiction in the event of a dispute; and
(4) the pertinent documents, parties, and witnesses—including the attorneys
who drafted and negotiated the Guarantees — were located in the UAE.
4
The dismissal motions were filed at different times and decided by the bankruptcy
court one month apart. However, since the motions were decided on identical grounds, we
discuss them as though they were filed and decided together.
7
Defendants noted that many of the witnesses could not be compelled to appear
in the United States, and even if they could, Arabic translators would be
necessary for testimony and for interpreting documents written in Arabic. In
addition, noted Defendants, any UAE judgment would be enforceable there
(and elsewhere if Cerner followed legal and procedural requirements), and
Belbadi LLC had assets in the UAE which Cerner could look to after it
established liability under the Guarantees.
Cerner opposed the motions to dismiss, arguing that Defendants had
failed to establish that the UAE was an adequate alternative forum, or that the
private and public interest factors weighed in favor of the UAE. Cerner argued
that the UAE was not an available forum because a UAE court could not hear
the entire case and not all of the parties were subject to UAE jurisdiction. Cerner
argued that UAE courts lacked jurisdiction over the Vandevco and Orland
estates and had no authority to enter an order attaching Belbadi LLC's assets in
Washington or Oregon. Because its action sought attachment to "take and hold
security" in Belbadi LLC's beneficial ownership interest in the Vandevco and
Orland shares, argued Cerner, suit in the UAE would deprive it of the benefit of
its bargain and result in an inadequate forum. Cerner maintained that the
parties understood that certain Belbadi LLC assets, including the Vancouver
Center, were put up as security for payment under the Guarantees.
In addition, argued Cerner, the private and public interest factors did not
weigh in favor of dismissal. Aside from Mr. Dhaheri, argued Cerner, many of
the relevant witnesses were in the United States, including the two witnesses
who negotiated the Guarantees—Mr. Greg White, Cerner's former Vice
8
President and General Manager, and Mr. Elhindi. Further, argued Cerner, no
witness testimony required translation because all of the witnesses spoke
English fluently, and essential documents for the Vancouver Center were
located in Washington. Cerner argued that the states of Washington and
Oregon had an interest in a case involving a foreign company's attempt to
evade a creditor headquartered in the U.S. through the use of sham, alter ego
Washington and Oregon corporations. More importantly, argued Cerner, part
of the dispute involved the Vancouver Center, which was one of the largest real
estate development projects in Vancouver's history. Lastly, argued Cerner,
Defendants had not shown that the bankruptcy court would have difficulty in
applying UAE law, which Cerner maintained was similar to Washington law, to
the Guarantees.
In reply, Defendants disputed Cerner's argument that the UAE was not an
available forum. According to Defendants, Belbadi LLC did not own nor has it
ever owned real property in Oregon or Washington, including the Vancouver
Center, and it was never the parties' understanding that the Vancouver Center,
or any other specific asset, was part of the security put up for payment of the
Guarantees. In justifying its position that Washington was the better forum,
argued Defendants, Cerner was conflating its collection action against
Vandevco and Orland with its liability suit against Belbadi LLC. Rather than
establishing liability against the party to its contract and then collecting
judgment, argued Defendants, Cerner was skipping steps and jumping straight
to pursuing Vandevco and Orland—Belbadi LLC's thrice-removed subsidiaries.
But this theory was flawed. Belbadi LLC was the only necessary party to
9
adjudicating liability under the Guarantees; neither Vandevco nor Orland was a
party to them, and neither had ever done business with Cerner or had anything
to do with the underlying contracts. Their only possible connection was as a
source of payment. Any direct claim Cerner had against Vandevco or Orland,
argued Defendants, was already the subject of the claim proceedings. And any
post-judgment collection efforts by Cerner, if it prevailed against Belbadi LLC
in the UAE, could be carried out in the United States using standard
domestication procedure.
The bankruptcy court issued a Memorandum Decision and Orders
granting the motions to dismiss the Adversary Proceedings on forum non
conveniens grounds. Cerner Middle East Ltd. v. Belbadi Enters., LLC (In re
Vandevco Ltd.), 632 B.R. 790 (Bankr. W.D. Wash. 2021). Dismissal was
conditioned on Belbadi LLC agreeing to submit to UAE jurisdiction and to
waive any statute of limitations or jurisdictional defenses. These timely appeals
followed.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(c)(2). We have jurisdiction under 28 U.S.C. § 158.
ISSUE
Did the bankruptcy court abuse its discretion in dismissing the
Adversary Proceedings on forum non conveniens grounds?
STANDARD OF REVIEW
Our review of the bankruptcy court's dismissal of the Adversary
Proceedings on forum non conveniens grounds is highly deferential and we
10
will reverse only if there has been a clear abuse of discretion. Vivendi SA v. T-
Mobile USA Inc., 586 F.3d 689, 693-94 (9th Cir. 2009); see also Carijano v. Occidental
Petroleum Corp., 643 F.3d 1216, 1224 (9th Cir. 2011) (citing Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 257 (1981)). In the context of forum non conveniens, the
bankruptcy court abuses its discretion if it relies on an erroneous view of the
law, relies on a clearly erroneous assessment of the evidence, or strikes an
unreasonable balance of relevant factors. Carijano, 643 F.3d at 1224.
DISCUSSION
A. The bankruptcy court did not abuse its discretion in dismissing the
Adversary Proceedings on forum non conveniens grounds.
"A federal court has discretion to dismiss a case on the ground of forum
non conveniens when an alternative forum has jurisdiction to hear the case, and
trial in the chosen forum would establish oppressiveness and vexation to a
defendant out of all proportion to plaintiff's convenience, or the chosen forum is
inappropriate because of considerations affecting the court's own
administrative and legal problems." Sinochem Int'l Co. v. Malaysia Int'l Shipping
Corp., 549 U.S. 422, 429 (2007) (cleaned up); see also Lueck v. Sundstrand Corp., 236
F.3d 1137, 1142 (9th Cir. 2001) (a federal court may decline to exercise
jurisdiction in a case where litigation in a foreign forum would be more
convenient for the parties). Dismissal for forum non conveniens is generally
only appropriate when the more convenient forum is in a foreign country. Am.
Dredging Co. v. Miller, 510 U.S. 443, 449 n.2 (1994).
However, forum non conveniens is "an exceptional tool to be employed
sparingly, and not a doctrine that compels plaintiffs to choose the optimal
11
forum for their claim." Carijano, 643 F.3d at 1224 (cleaned up). In dismissing an
action on forum non conveniens grounds, the court must consider (1) whether
an adequate alternative forum exists, and (2) whether the balance of private and
public interest factors favors dismissal. Id.
"A defendant invoking forum non conveniens ordinarily bears a heavy
burden in opposing the plaintiff's chosen forum." Sinochem, 549 U.S. at 430.
However, "the presumption in the plaintiff's favor 'applies with less force'"
when the plaintiff is foreign, "for the assumption that the chosen forum is
appropriate is in such cases 'less reasonable.'" Id. (quoting Piper Aircraft Co., 454
U.S. at 255-56).
1. Adequate alternative forum
The first requirement for a dismissal on forum non conveniens grounds is
that an adequate alternative forum is available to the plaintiff. Lueck, 236 F.3d at
1143. Availability of an alternative forum "ordinarily exists when defendants
are amenable to service of process in the foreign forum and when the entire case
and all parties can come within the jurisdiction of that forum." Gutierrez v.
Advanced Med. Optics, Inc., 640 F.3d 1025, 1029 (9th Cir. 2011) (citing Dole Food
Co. v. Watts, 303 F.3d 1104, 1118 (9th Cir. 2002) (internal quotation marks
omitted)). An alternative forum is adequate "when it provides the plaintiff with
a sufficient remedy for his wrong." Dole Food Co., 303 F.3d at 1118. "[T]ypically, a
forum will be inadequate only where the remedy provided is so clearly
inadequate or unsatisfactory, that it is no remedy at all." Tuazon v. R.J. Reynolds
Tobacco Co., 433 F.3d 1163, 1178 (9th Cir. 2006) (citations and quotation marks
omitted).
12
First, the bankruptcy court determined that the alternative forum of the
UAE was available. It began by observing that the bankruptcy filings had
changed the landscape of the parties' dispute. Cerner's core claim asserted in
the complaints was for breach of contract to establish Belbadi LLC's liability on
the Guarantees. Vandevco and Orland were not necessary parties to that
dispute. Their only possible connection to Cerner was as a source of payment if
Cerner established that Belbadi LLC breached the Guarantees and if Cerner
established that Vandevco and Orland, as alter egos of Belbadi LLC, were liable
for Belbadi LLC's debts. Although Vandevco and Orland were not subject to
UAE jurisdiction, they were subject to the exclusive jurisdiction of the
bankruptcy court, and any direct relief Cerner was seeking against either
debtor's estate in the adversary proceedings could be awarded by the
bankruptcy court in the claim proceedings, and without the need for entry of a
judgment on the Guarantees. Therefore, although the bankruptcy court said it
was not technically "severing" Cerner's claims against Vandevco and Orland, it
observed that the parallel proceedings available to Cerner in the bankruptcy
court had the same effect. Thus, under the unique facts of the case, the court
concluded that the UAE was an available forum with jurisdiction over the
necessary parties—i.e., Cerner and Belbadi LLC—and the breach of contract
dispute.
The bankruptcy court also determined that the alternative forum of the
UAE was adequate. It found that nothing in the record supported a finding that
the UAE would completely deprive Cerner of any remedy or result in unfair
treatment. It rejected as a red herring Cerner's argument that the UAE was not
13
an available or adequate forum because UAE courts will not order attachment
of property outside the UAE. The court noted that most jurisdictions, including
the United States, will not issue attachment orders outside of their territorial
jurisdiction. In any case, noted the court, such remedies would be available if
Cerner obtains a judgment in the UAE and domesticates it within the United
States. In addition, the bankruptcy claims process provided Cerner with a
remedy if liability on the Guarantees was established.
Cerner argues that the bankruptcy court erred in determining that the
UAE was an available or adequate forum because (1) UAE courts are unable to
order specific performance to take security over Belbadi LLC's assets in the
United States, which is Cerner's third claim for relief and which it contends the
bankruptcy court ignored, and (2) not all of the claims and defendants could
come within its jurisdiction. As for Cerner's first argument, we reject it for the
same reasons as did the bankruptcy court. A UAE court's inability to order
specific performance to take security over Belbadi LLC's assets in the United
States, which may not exist anyway, does not render that forum inadequate. See
Lueck, 236 F.3d at 1143 (the foreign forum need only provide the plaintiff with
"some remedy" for the wrong at issue for the alternative forum to be adequate).
Cerner inexplicably continues to disregard that it is free to obtain a judgment
against Belbadi LLC in the UAE and exercise collection procedures there against
whatever assets are within the court's jurisdiction, or to domesticate any such
judgment in the United States and proceed accordingly. Further, Cerner's
purported "claim" of specific performance is not a standalone claim for relief; it
is an equitable remedy used to compensate a contractual party when a damages
14
award may be inadequate. See e.g., Pauma Band of Luiseno Mission Indians of
Pauma & Yuima Rsrv. v. Cal., 813 F.3d 1155, 1167 (9th Cir. 2015) ("Specific
performance is a remedy associated with breach of contract.") (citing the
Restatement (Second) of Contracts § 357; 81A C.J.S. Specific Performance § 4
(2015) ("[A] cause for specific performance ordinarily cannot lie until there has
been a breach of the contract.")).
We also reject Cerner's second argument. Forum non conveniens is a
flexible rather than an all-or-nothing doctrine. See Piper Aircraft Co., 454 U.S. at
249-50. "Depending upon the facts of the particular case, a district court may
dismiss part of a lawsuit [on the basis of forum non conveniens] while deciding
the merits of other issues." Scottish Air Int'l, Inc. v. British Caledonian Grp., PLC,
81 F.3d 1224, 1234-35 (2d Cir. 1996) (allowing the district court to retain a
contempt claim and dismiss other claims on forum non conveniens grounds);
see Su v. M/V S. Aster, 978 F.2d 462, 472 (9th Cir. 1992) (dismissal of some claims
on the merits and the remainder on forum non conveniens grounds); see also
Allarcom Pay Television, Ltd. v. Home Box Office, Inc., 210 F.3d 381 (9th Cir. 2000)
(table) (citing Scottish Air and Su and holding that the district court's decision to
dismiss part of the suit on forum non conveniens grounds and to dismiss
remaining claims on the merits was not an abuse of discretion).
Vandevco and Orland are not necessary parties to the breach of contract
dispute. Because Cerner may obtain the same relief requested in the complaints
against Vandevco and Orland through the claims process, dismissal of the
Adversary Proceedings effectively dismissed only defendant Belbadi LLC and
the breach of contract claim. The bankruptcy court had the authority to dismiss
15
defendant Belbadi LLC and the breach of contract claim, yet retain the alter ego
claims against defendants Vandevco and Orland. See Scottish Air Int'l, Inc., 81
F.3d at 1234-35; Su, 978 F.2d at 472.
Cerner cites Gutierrez and Dole Food Co. to argue that a foreign forum is
available only when the entire case and all parties can come within its
jurisdiction, and because that was not the case here, the bankruptcy court erred
in finding that the UAE forum was available. We do not view these cases as so
limiting. Gutierrez, citing Dole Food Co., held that availability of an alternative
forum "ordinarily" exists when defendants are amenable to service of process in
the foreign forum and the entire case and all parties can come within the
forum's jurisdiction. 640 F.3d at 1029 (citing Dole Food Co., 303 F.3d at 1118). We
believe the Circuit panel's use of the word "ordinarily" left intact a court's
discretion, in the proper circumstances, to retain some claims yet dismiss others
on forum non conveniens grounds. This is consistent with the flexibility the U.S.
Supreme Court has held the doctrine requires. See Van Cauwenberghe v. Biard,
486 U.S. 517, 529 (1988) ("As we previously have recognized, the district court is
accorded substantial flexibility in evaluating a forum non conveniens motion.");
Piper Aircraft Co., 454 U.S. at 249 (underscoring that the Court has "repeatedly
emphasized the need to retain flexibility").
Gutierrez and Dole Food Co. are also distinguishable. In neither case did the
Circuit panel reverse the district court for dismissing part of a lawsuit rather
than the entire case. See Gutierrez, 640 F.3d at 1029-31 (vacating district court's
proper dismissal on forum non conveniens grounds because later developments
showed that the foreign forum was not available because the Mexican court
16
declined to accept jurisdiction); Dole Food Co., 303 F.3d at 1118 (reversing
dismissal because, among other things, only one of two defendants consented to
jurisdiction in the alternative forum).
Thus, Defendants had to prove only that the UAE was an adequate
alternate forum for Belbadi LLC. They did so. Belbadi LLC is amenable to
service of process in the UAE, and the UAE has jurisdiction over Belbadi LLC
(and Cerner) and the breach of contract claim. Indeed, Cerner and Belbadi LLC
have already been litigating aspects of this dispute there. Accordingly, the
bankruptcy court did not abuse its discretion in determining that the UAE was
an adequate alternative forum.
2. The balance of private and public interest factors
Even when an adequate alternative forum exists, the court will not disturb
the plaintiff's choice of forum unless the "private interest" and the "public
interest" factors strongly favor dismissal. Tuazon, 433 F.3d at 1180 (citing Lueck,
236 F.3d at 1146). While the "private interest factors" affect the convenience of
the litigants, the "public interest factors" affect the convenience of the forum.
Piper Aircraft Co., 454 U.S. at 241. We turn now to our review of the bankruptcy
court's balancing of these factors.
a. Private interest factors
Factors relating to the private interests of the litigants include: "(1) the
residence of the parties and the witnesses; (2) the forum's convenience to the
litigants; (3) access to physical evidence and other sources of proof; (4) whether
unwilling witnesses can be compelled to testify; (5) the cost of bringing
witnesses to trial; (6) the enforceability of the judgment; and (7) all other
17
practical problems that make trial of a case easy, expeditious and inexpensive."
Boston Telecomms. Grp. v. Wood, 588 F.3d 1201, 1206-07 (9th Cir. 2009) (quoting
Lueck, 236 F.3d at 1145). The court "should look to any or all of the above factors
which are relevant to the case before it, giving appropriate weight to each. It
should consider them together in arriving at a balanced conclusion." Lueck, 236
F.3d at 1145-46 (citations omitted).
In carefully considering all seven factors, the bankruptcy court found that
each weighed in favor of the UAE forum. Cerner argues that the bankruptcy
court misapplied these factors and should have found that all of them favored
resolving the Adversary Proceedings in Washington and Oregon. Cerner
appears to be contending that even the bankruptcy court is not the proper
forum. However, Cerner did not appeal the orders denying remand. In any
event, we conclude that the bankruptcy court did not misapply any of the
private interest factors.
As for the first factor—residence of the parties and witnesses—the
bankruptcy court found that this factor weighed heavily in favor of the UAE
forum: (1) Cerner is a Cayman Island company, Belbadi LLC is a UAE
company, and both companies operate primarily or exclusively in the Middle
East; (2) the law firms used by both parties to negotiate and draft the
Guarantees are located in the Middle East, and the witnesses with personal
knowledge of negotiating and drafting the Guarantees are in the UAE, where
the negotiations occurred; and (3) Mr. Dhaheri, a key witness, is in the UAE.
While Cerner argued that many of the relevant witnesses besides Mr. Dhaheri
were in the United States, the bankruptcy court found that Cerner had not
18
shown that such witnesses, with the exception of Mr. White and Mr. Elhindi,
had any personal knowledge about the dispute between Cerner and Belbadi
LLC under the Guarantees (which neither Vandevco nor Orland was a party to)
or the underlying settlement agreement. The testimony of these purported
witnesses was, if anything, relevant to Cerner's collection action against
Vandevco and Orland.
Cerner argues that the bankruptcy court abused its discretion by
minimizing the relevance of Vandevco and Orland to the Adversary
Proceedings and the testimony of the witnesses to the claims in the complaint—
namely, that Cerner be allowed to "take and hold" Belbadi LLC's assets as
security under the Guarantees, including its beneficial ownership interest in the
Vandevco and Orland shares. We disagree. As we stated above, Vandevco and
Orland are not necessary parties to any action to determine Belbadi LLC's
liability to Cerner under the Guarantees. Further, the Vancouver Center, which
is what Cerner really wants, is not an asset of Belbadi LLC but rather of the
Vandevco estate. The only way the assets of Vandevco or Orland will become
subject to Cerner's claims is if Cerner can show that the two entities are Belbadi
LLC's alter egos. Cerner will have the opportunity to elicit testimony from the
alter ego witnesses in the claim proceedings. Of course, a successful alter ego
ruling is meaningless if Cerner fails to obtain a judgment against Belbadi LLC
for breach of the Guarantees.
Next, since the majority of the material witnesses to the Guarantees and
underlying contracts were in the UAE, the bankruptcy court found that the
UAE was the more convenient forum to litigate the dispute between Cerner and
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Belbadi LLC. Cerner argues that the bankruptcy court abused its discretion in
deciding this second factor because it was based on its erroneous analysis of the
first factor. However, because the court's analysis of the first factor was not
erroneous, neither was its decision as to the second factor.
As with the material witnesses to the Guarantees and underlying
contracts, the bankruptcy court found that the documents pertinent to these
matters were located primarily in the UAE. Thus, it found that the third factor—
access to evidence—weighed in favor of the UAE forum. Cerner continues to
argue that many of the relevant documents are located in the United States.
However, as the bankruptcy court correctly found, the documents which Cerner
references are not relevant to Cerner and Belbadi LLC's breach of contract
dispute. Rather, they are relevant only to the alter ego issue and can be used by
Cerner in the claim proceedings.
Respecting the fourth factor—whether unwilling witnesses can be
compelled to testify—the bankruptcy court noted that Cerner has spent years
trying to establish personal jurisdiction over Belbadi LLC and Mr. Dhaheri, a
key witness, in domestic federal and state courts with little success. However,
the UAE has jurisdiction over the contractual dispute and the parties, and most
of the relevant fact witnesses are in the UAE. The court opined that it was
"extremely unlikely" to compel Mr. Dhaheri and the other witnesses to appear
or testify as was evidenced by Cerner's prior failed attempts to depose Mr.
Dhaheri or compel his appearance in the United States. On the other hand, a
UAE court could compel the appearance of these witnesses.
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We reject Cerner's argument that the bankruptcy court's reliance on the
location of the witnesses as the UAE was an abuse of discretion because Mr.
White and Mr. Elhindi live in the United States. While these two witnesses may
be material to the contractual dispute involving iCapital, Cerner, and Belbadi
LLC, they are only two of many material witnesses potentially testifying in the
matter; most of the material witnesses live in the UAE. Cerner also argues that
the bankruptcy court was wrong to speculate that a UAE court could compel
the appearance of Mr. White and Mr. Elhindi. The bankruptcy court made no
such speculation. It observed only that a UAE court could compel the
appearance of witnesses who live in and are citizens of the UAE. Moreover,
Cerner's argument, even if true, makes little sense as to Mr. White; he is a
witness for Cerner and his appearance would not need to be compelled.
As for the fifth factor—the cost of bringing witnesses to trial—the
bankruptcy court found that, even if it could compel foreign citizens to appear
before it, the cost to bring them to Washington to testify would be prohibitive.
There was also the ongoing pandemic to consider and its impact on global
travel. Cerner argues that the cost of bringing witnesses to trial weighs heavily
in favor of the bankruptcy court because nearly all of the relevant witnesses
would be traveling within the United States. This assumes, however, that the
witnesses Cerner speaks of are relevant to the contractual dispute between
Cerner and Belbadi LLC. We have already concluded that they are not. Those
that are, with the exception of Mr. White and Mr. Elhindi, reside in the UAE.
Cerner did not address in its opposition to dismissal the sixth factor—
enforceability of the judgment. In any case, the bankruptcy court noted that if
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Cerner obtains a judgment in the UAE, procedures exist in the United States,
including through the bankruptcy case, for seeking enforcement. Cerner argues
that the bankruptcy court failed to consider that a UAE court cannot order
specific performance or grant security under the Guarantees on assets located in
Washington or Oregon. Actually, the bankruptcy court did consider this fact
and rejected it. Further, Cerner's argument assumes that Belbadi LLC has any
assets in those states and that such assets were put up as security for payment
under the Guarantees, which is disputed. In any event, Cerner will have
enforcement options here, if necessary, assuming it gets a judgment in the UAE.
Finally, respecting the seventh factor—other practical problems that make
trial of a case easy, expeditious and inexpensive—the bankruptcy court found
that the cost for interpretive services and services needed to translate
documents from Arabic to English provided additional complications. There
was also the potential for mistakes, as the differences between the English and
Arabic versions of the Guarantees illustrated. The court found that these
additional complications, while not dispositive, weighed in favor of the UAE
forum.
Cerner argues that no practical problems such as potential issues with
interpreters and translators existed. Cerner contends that all of the witnesses
speak English fluently, as evidenced by their depositions and prior trial
testimony, and that no other documents other than the Guarantees were in
Arabic. Thus, argues Cerner, the bankruptcy court abused its discretion by
improperly invoking "additional complications" as evidence weighing in favor
of the UAE. Even if Cerner's assertions, which were not established in the
22
record, were correct, this one factor is not dispositive and would not support a
conclusion that the bankruptcy court abused its discretion in its weighing of the
private interest factors.
Because the bankruptcy court's findings are supported by the record, we
conclude that it did not abuse its discretion when it determined that the private
interest factors favored dismissal.
b. Public interest factors
The public factors related to the interests of the forums include: "(1) the
local interest in the lawsuit; (2) the court's familiarity with the governing law;
(3) the burden on local courts and juries; (4) congestion in the court; and (5) the
costs of resolving a dispute unrelated to a particular forum." Boston Telecomms.
Grp., 588 F.3d at 1211 (quoting Tuazon, 433 F.3d at 1181).
In carefully considering these five factors, the bankruptcy court found
that three weighed in favor of litigation in the UAE and that two were neutral.
Like the private interest factors, Cerner argues that the bankruptcy court
misapplied these factors to determine that they too supported dismissal on
forum non conveniens grounds. While Cerner argues that all five factors
weighed in favor of resolving the Adversary Proceedings here rather than the
UAE, it does not directly challenge the court's findings on factors (3) and (4),
which the court found were neutral. We conclude that the bankruptcy court did
not misapply any of the public interest factors.
The first factor—local interest in the lawsuit—focuses on whether the
forum in which the lawsuit was filed has its own identifiable interest in the
litigation that can justify proceedings as opposed to how well-equipped a
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jurisdiction is to handle a case. See Carijano, 643 F.3d at 1232. The bankruptcy
court found that, while it clearly had an interest in the assets of Vandevco and
Orland, it had no identifiable interest in the primary dispute between Cerner
and Belbadi LLC—two foreign corporations that negotiated and entered into
commercial contracts in the UAE under UAE law. Conversely, the court found
that the UAE had a strong interest in this litigation: (1) the contract was
negotiated and entered into in the UAE and is governed by UAE law;
(2) Belbadi LLC is a UAE company, and Cerner is a foreign corporation which
conducts business primarily, if not exclusively, in the Middle East and Africa;
(3) the majority of the material witnesses and evidence at the center of the
controversy are in the UAE; and (4) Cerner and Belbadi LLC consented to
jurisdiction in the UAE. Consequently, the court found that this factor weighed
in favor of litigation in the UAE.
Cerner argues that the bankruptcy court abused its discretion by focusing
solely on the connections between the Guarantees and the UAE and ignoring
the local interest of Washington and Oregon in a party's use of sham alter ego
entities to evade legitimate creditor claims. Cerner contends that its ability to
take and hold security anywhere Belbadi LLC's assets could be found in the
United States, including the Vancouver Center in Washington, was a crucial
part of the Guarantees which the bankruptcy court ignored.
First, as the bankruptcy court correctly observed, the Guarantees do not
identify any specific security, nor was a security agreement ever executed for
any of Belbadi LLC's alleged assets in Washington or Oregon, including those in
the Vandevco and Orland estates. Second, the bankruptcy court did not ignore
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this issue as Cerner contends. Rather, it considered it and noted that the issue of
Cerner's direct access to the bankruptcy estates as a source of recovery would be
addressed and adjudicated in the claim proceedings, and if Cerner prevailed, it
would be provided relief through a confirmed plan. In the court's opinion,
however, this did not create an interest for the states of Washington or Oregon
in the breach of contract claim between Cerner and Belbadi. We agree. The
actions forming Cerner's complaints took place between foreign parties outside
of the United States and involve foreign law. We see no abuse of discretion by
the court as to this factor.
The bankruptcy court found that the second factor—the court's familiarity
with the governing law—also weighed in favor of litigation in UAE. The
Guarantees are governed by UAE law. The court acknowledged its
unfamiliarity with UAE law, and noted that reading, understanding, and
applying UAE law—which is written in Arabic—would require translators and
research platforms the court currently did not utilize. The court was also
concerned that its lack of familiarity with UAE law and the UAE's legal system
might impact its ability to effectively and efficiently adjudicate the contract
dispute.
Cerner argues that the bankruptcy court abused its discretion as to this
second factor because familiarity with UAE law was a minor issue. Cerner
argues that its claim for breach of the Guarantees is straightforward, and
therefore the bankruptcy court's need for familiarity with UAE law to resolve it
would be minimal. Cerner argues, the court's notion that this case would
25
present difficult issues of UAE law requiring extensive translation or research
was specious.
That the bankruptcy court viewed UAE courts as better positioned to
adjudicate matters arising under UAE law does not constitute an abuse of
discretion. While the need to apply foreign law does not warrant dismissal in
itself, it is a factor favoring dismissal. Piper Aircraft, 454 U.S. at 260 & n.29.
Cerner has never fully explained its reluctance to litigate what it contends is a
"simple" breach of contract action in the UAE. In any event, Cerner's position is
undermined by the fact that it has prevailed in litigation there against Belbadi
LLC over some aspects of the Guarantees. Thus, not only are UAE courts
already familiar with the applicable law, at least two of them are familiar with
the parties and the facts of this case.
Finally, as to the fifth factor—the costs of resolving a dispute unrelated to
the forum—the bankruptcy court rejected Cerner's argument that this factor
was inapplicable because it pertains only to the costs associated with "unrelated
disputes," and it was Cerner's contention that the suit on the Guarantees was
not an "unrelated" dispute. The bankruptcy court had already determined that
the suit against Belbadi LLC was unrelated to the administration of Vandevco
and Orland's estate assets. Thus, it found that the costs to litigate this unrelated
matter in the bankruptcy court would be tremendous with respect to witnesses,
evidence, and court resources. Accordingly, the court found that this factor
weighed in favor of dismissal.
Cerner disputes the bankruptcy court's finding that its suit against
Belbadi LLC was unrelated to the administration of the debtors' assets within
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the estates, when those assets are directly connected to Cerner's claims and are
the assets Cerner seeks to "take and hold" under the Guarantees. Again,
determining Belbadi LLC's liability under the Guarantees has nothing to do
with Cerner's claims against the estates of Vandevco and Orland, which will be
allowed if Cerner is successful in the alter ego matter being litigated in the claim
proceedings.
Because the bankruptcy court's findings are supported by the record, we
conclude that it did not abuse its discretion when it determined that the public
interest factors favored dismissal.
3. Final analysis on the private and public interest factors
In summary, the bankruptcy court properly considered the relevant
private and public interest factors, its findings are supported by the record, and
its balancing of these factors to conclude that they weighed in favor of dismissal
was not unreasonable.
CONCLUSION
Because the UAE provides an adequate alternative forum and based on
the balance of private and public interest factors, we conclude that the
bankruptcy court did not abuse its discretion in dismissing the Adversary
Proceedings on forum non conveniens grounds. We AFFIRM.
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