Jaffer v. Standard Chartered Bank, No. 13-cv-1674-G, (N.D. Tex. July 2, 2014) [click for opinion]

Standard Chartered Bank, a London company doing business in New York, owns roughly two-thirds of Standard Chartered Bank Ghana’s outstanding ordinary shares.  Plaintiffs sued Standard Chartered Bank to recover funds related to an account held with Standard Chartered Bank Ghana, but did not include Standard Chartered Bank Ghana as a defendant.  So Standard Chartered Bank filed a motion to dismiss for failure to join an indispensable party.

The court noted at the outset that the motion to dismiss was improper because Standard Chartered Bank did not assert failure to join a necessary party in its first motion to dismiss.  The court nonetheless invoked its power to decide the issue sua sponte in the interest of preventing injustice. 

As to the merits, the court observed that Standard Chartered Bank Ghana was the primary actor and central to the contract with Plaintiffs, was the last known bank to have Plaintiffs’ funds, would have the most knowledge of Plaintiffs’ bank account, and was likely the party that breached the contract, assuming a breach occurred.  The court, applying the relevant four-factor test, determined that Standard Chartered Bank Ghana was an indispensable party such that Plaintiffs could not proceed without it. 

First, Standard Chartered Bank Ghana would be prejudiced if a judgment were rendered in its absence.  Second, the court could not adequately mitigate the prejudice stemming from a verdict against Standard Chartered Bank in Standard Chartered Bank Ghana’s absence.  Third, the court lacked personal jurisdiction over Standard Chartered Bank Ghana—since it only did business in Ghana and had no contacts with the forum state—and so could not compel it to provide evidence, and any judgment would create inadequate results and waste resources of all the parties.  Finally, a proper alternative forum existed in Ghana; that forum would minimize prejudice and litigation resources. 

The court therefore dismissed the complaint.

Christina Wong of the San Francisco office contributed to this summary.