On December 7, New York Supreme Court Justice Eileen Bransten dismissed a $500 million lawsuit against UBS AG (“UBS”) brought by Ace Decade Holdings Limited (“Ace Decade”), a British Virgin Islands company, for lack of personal jurisdiction and forum non conveniens. Ace Decade alleged that UBS fraudulently induced it to invest in shares of a company publicly traded in Hong Kong through a UBS-affiliated intermediary in Hong Kong, an affiliation that UBS concealed. Ace Decade’s investment allegedly resulted in a loss of more than $500 million.
Ace Decade pled that both general and specific jurisdiction existed because UBS had systematic contact with New York and transacted business in New York that gave rise to the claims: the “cause of action [arose] from a transaction that UBS induced Ace Decade to make…months after Ace Decade moved to New York,” “UBS made misrepresentations to Ace Decade over several months while they were in New York,” and “UBS’s tortious acts injured Ace Decade in New York.”
In its motion to dismiss, UBS argued that under Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014), UBS is not subject to general jurisdiction in New York because UBS is incorporated in and has its principal place of business in Switzerland. Furthermore, UBS argued that New York lacked specific jurisdiction because the transactions giving rise to Ace Decade’s claims occurred in Hong Kong, not New York. Lastly, UBS argued that New York was not a convenient forum for several reasons, including the fact that trying the case in New York would impose undue hardship on UBS because almost all relevant witnesses and documents were abroad.
Justice Bransten agreed with UBS and held that the Court lacked personal jurisdiction. She stated that “the record makes clear that the ‘original critical events’ associated with the [i]nvestment occurred in Hong Kong.” The fact that Ace Decade moved to New York after entering into all relevant agreements and committing to make an investment was not a sufficient basis for jurisdiction. The Court also concluded that even if it could properly exercise jurisdiction, the action would be dismissed based on forum non conveniens because all relevant documents and witnesses are located in Hong Kong.