Long-time readers may recall that just a short time ago there was growing concern that New York’s courts might be becoming a preferred forum for aggrieved investors to pursue liability claims against non-U.S. companies’ executives, based on the companies’ home country laws. However, in early 2022, just as the alarm bells began to sound, New York courts issued a series of rulings dismissing various cases of this kind, suggesting that the furor might have been overblown. But even following these events, concern remained that New York’s courts might still prove to be available in at least certain circumstances for claims under home country law against non-U.S. companies and their executives.

A recent decision from a New York trial court, in which the court denied the defendants’ motion to dismiss a breach of fiduciary duty claim brought under Cayman law against former officers and directors of a Cayman company, confirms that, under some circumstances at least, New York courts may be an available forum for litigants to pursue these kinds of claims involving non-U.S. companies. The fact that the Court accepted the case, and the considerations that proved to be relevant to the court, are both instructive.


Sou Fun Holdings Limited (now known as Fang) at relevant times was a NYSE-listed Cayman Islands limited liability company. Until February 28, 2022, when he stepped down, Vincent Tianquan Mo was Fang’s controlling shareholder and chairman. Richard Dai, Mo’s nephew, was Mo’s successor as Chairman. Mo and Dai are citizens of the People’s Republic of China.

In a New York state court action, Fang investors sued Mo, Dai, and their related investment vehicles, alleging that Mo and Dai used a multistep transaction to loot Fang and enrich themselves in breach of their fiduciary duties. The various steps involved in the transaction are quite intricate.

The plaintiffs’ allege that the defendants began their scheme when Mo and Dai induced Fang to spin off a valuable and profitable subsidiary, China Index Holdings Limited (CIH). The investors allege that Mo and Dai then induced Fang to buy CIH shares at inflated prices from Mo and Dai. Mo and Dai allegedly then induced Fang to delist from the NYSE, to depress the price of CIH (which allegedly allowed Mo and Dai “to scoop up large swathes of Fang and CIH shares”). Finally, Mo and Dai allegedly caused Fang to participate in a CIH take private transaction that permitted Mo and Dai to profit personally.

(My brief summary of the steps in the transaction necessarily leaves out a lot of details, some of which arguably are important. Readers may want to take the time to review the court’s opinion, to which I link below, to get a fuller understanding of the steps in the transaction.)

After investors launched a breach of fiduciary duty against Mo, Dai, and their investment vehicles, the defendants filed a motion to dismiss based on lack of personal jurisdiction over Fang and the two individuals, and also based on forum non conveniens. The defendants argued that Cayman courts are a more convenient and suitable forum for a claim involving a Cayman company and based on alleged violations of Cayman law.

The Court’s Opinion

In a May 2, 2024 opinion, New York (New York County) Supreme Court Commercial Division Justice Andrew Borrok denied the defendants’ motion to dismiss, holding that Fang, Mo, and Dai were subject to personal jurisdiction and the defendants had not demonstrated that Cayman Islands is a more convenient forum. A copy of the opinion can be found here.

In concluding that the Court had personal jurisdiction over the defendants, Justice Borrok said that Mo and Dai “used and manipulated the New York markets to breach their fiduciary duties in orchestrating and consummating the Transaction to loot Fang for their own benefit.” The Transaction, Justice Borrok said, “involved a significant number of critical New York contacts such that jurisdiction is proper,” because “there is an articulable nexus or substantial relationship between the transactions and the claim asserted.”

In addition, because the defendants “purposefully availed themselves of the privileges of New York,” and “given the multiple New York contacts,” the defendants “should reasonably expect to defend this lawsuit in New York.”

Justice Borrok also specifically found the Court had personal jurisdiction over Mo and Dai, even though they are citizens and residents of the People’s Republic of China. Justice Borrock concluded that the two individuals were “primary actors” with respect to the transaction and they exercised a degree of control over the corporation with respect to the transaction. Justice Borrock cited the numerous allegations in the complaint allegedly showing the individuals’ involvement in the transaction.

In rejecting the defendants’ forum non conveniens arguments, Justice Borrok specifically found that “New York has a strong interest in adjudicating this lawsuit and the factors which support specific jurisdiction establish a strong factual and legal connection to New York.” Among other things, the defendants came to New York numerous times over the years, including in connection with Fang’s corporate affairs. The causes of action arise out of the defendants’ New York contacts and many of the relevant agreements involving in the Transaction designate New York law and a New York forum.

For their part, the defendants made “virtually no credible showing” that litigating in New York would be inconvenient or that litigating in the Cayman Islands would be more convenient. The defendants’ arguments, Justice Borrok said, “amount to little more than Messrs. Mo and Dai are from China and many of their decisions were made in board rooms located in China, notwithstanding their New York impact.” Borrok also noted that there does not appear to be any evidence relevant to this litigation in the Cayman Islands. He concluded by noting that the Court is often called upon to apply foreign law and the burden on the court is not substantial.


Some readers with long memories may have noted the similarity between the basic factual allegations in this case and the facts involved in the Renren derivative litigation (discussed in detail here), in which the New York courts concluded that that they have jurisdiction over a shareholder derivative lawsuit brought by investors under Cayman law and involving a Cayman company. Indeed, in his opinion in this case, Justice Borrok quoted extensively from and expressly relied upon the appellate court’s opinion in the Renren case. Notably, Justice Borrok was also the trial court judge presiding over the Renren case.

While Justice Borrock concluded in this case, as in the Renren case, that New York courts could proceed with the claims under the home country’s laws involving a non-U.S. company, that should not necessarily set off alarm bells about the possibility that a bunch of non-U.S. companies are about to be hauled into New York courts to defend D&O claims arising under their home countries’ laws.

For starters, Justice Borrock’s rulings in this case are very fact specific, and mostly depend on his findings concerning the extensive connections between the underlying transaction and the state of New York. (Again, the details are important here, and readers wishing to understand which New York contacts were important to the court’s conclusions should read the opinion in full.)

It is also probably worth noting that in many (perhaps most) other circumstances, non-U.S. companies will have little difficulty showing that their home country’s courts would be a more convenient forum for the consideration of corporate disputes. Whereas this case had very few practical connections to the Cayman Islands, most non-U.S. companies and in most circumstances will be able to show innumerable important contacts with their home country, and also, unlike here, be able to show that most or all of the relevant evidence is in their home countries.

It is also worth noting that in a series of rulings (discussed here), in which New York’s courts (including even Justice Borrok) granted motions to dismiss New York state court corporate disputes involving non-U.S. companies, one of the bases on which the dismissals were granted was the existence of a home country forum designation clause in the corporation’s charter. In other words, companies that are worried about getting hauled into New York (or anywhere else in the U.S.) can take preventive measures to protect themselves.( Just as an aside, it should be noted that an appellate court recently upheld one of the key dismissal rulings, as discussed here.)

All of that said, Justice Borrok’s rulings in this case do underscore the fact that in certain circumstances at least non-U.S. companies could have to face corporate disputes filed in New York state court. Those wanting to weigh the significance of this fact will want to consider that the Renren case, to which I referred above, ultimately settled for about $300 million dollars. (The exact final amount of the settlements is a detail that has eluded me; it was in any event a big settlement and one of the largest ever derivative lawsuit settlements in the U.S. To be sure, the parties’ efforts to settle the Renren case became procedurally complicated; among other things, the court initially rejected the settlement. However, the case did finally settle.)

In other words, even though the possibility of a non-U.S. company having to face a corporate dispute in a New York court may be relatively remote, the risks associated with facing a lawsuit of this kind in New York could be substantial. Well-advised companies may want to consider the possibility of amended their corporate charter documents to include a home country forum selection clause.