Thoughts on Yaiguaje

Earlier today I published Doug Cassel’s comment on Yaiguaje. Here are a few of my own thoughts on the case:

  1. Comparison with American decisions. Yaiguaje comes right out and says it: there is no requirement of a “real and substantial connection”—that is, no requirement of minimum contacts for personal jurisdiction purposes—between the forum state and the state that rendered the judgment. The only question of personal jurisdiction, or real and substantial connection, is whether there was a sufficient connection between the judgment debtor and the state that rendered the judgment. I think this is the right rule at least in cases where the judgment debtor has some property in the forum state, and maybe even if it doesn’t. But the American cases are not all in agreement. I’ve discussed this point a few times, maybe at greatest length in this post from March 2012. In short, it seems to me that judgment creditors should be able to sue judgment debtors to seek enforcement in any jurisdiction where the judgment debtor has assets that can be taken on execution. Otherwise the judgment debtor has an effective way to avoid paying what it owes. I think there is a potential “judgment arbitrage” problem, but because recognition of foreign country judgments is a matter of comity not a matter of right, it seems to me simple just to say that a judgment of the courts of Country B recognizing the judgment of the courts of Country A should not itself be entitled to recognition in Country C. The judgment creditor should have to seek recognition of the judgment in each country where it seeks enforcement, at least in the absence of any special circumstance (a treaty, for example, requiring the courts of Country C to recognize the judgment of Country B).
  2. The Time Value of Money. The decision was a clear loss for Chevron, but one way to look at this is to say that Chevron has managed to delay proceedings by more than two years, since we now are back where we were in May 2013, when the Ontario court first stayed the action. Suppose Chevron has $9 billion to invest. How much does it earn on that investment in two years? Even if the Canadian Supreme Court’s decision meant that Chevron has to pay up (it doesn’t), there’s a sense in which delay is a kind of victory for Chevron.
  3. Battles Yet To Come. As Doug pointed out this morning, the decision is merely jurisdictional. It is still open to Chevron to argue its points of Canadian corporate law about the permissibility of reaching the Canadian Chevron affiliate’s assets to satisfy the judgment, and to argue its broader points about fraud in Ecuador in an attempt to avoid recognition in the first instance. I think one of the main battles will be fought over the weight the Canadian court is to accord Judge Kaplan’s findings of fact. It may be that the answer to this question will have to wait on the Second Circuit’s decision on the LAPs’ and Donziger’s appeal.

Coming soon: I hope to have some additional commentary on Yaiguaje for you!

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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