Will U.S.A. Courts enforce judgments obtained in other countries? In the recent DeJoria vs Maghreb Petroleum Exploration, S.A., – Mideast Fund For Morocco, Ltd case, the 5th Federal Circuit Court of Appeals discusses how U.S.A. Courts should review foreign judgments.
The case arose from a petition by two Moroccan companies seeking to enforce in Texas a judgment rendered against John Paul DeJoria Texas citizen, major investor in an American company engaged in oil explorations and technology projects in Morocco. The suit to enforce, originally filed in a Texas national District Court, was transferred to a Federal District Court because of diversity of citizenship between parties.
The enforcement of foreign judgements in Texas is governed by the Texas Recognition Act., that establish a general principle of recognition of foreign judegments, “conclusive between the parties” and “enforceable in the same manner as a judgement of a sister state that is entitled to full faith and credit.” There are also ten statutory grounds for non-recognition, available to the party seeking to avoid foreign judgment’s enforcement in Texas. The judgement debtor has to meet the burden of proof the existence of one of these grounds. ( Section 36.005-a and Section 36.005-b). Mr. DeJoria asserts that Moroccan judicial system does not provide due process and the Moroccan court lacked personal jurisdiction. These two grounds are both included in Section 36.005 list of non- recognition mandatory grounds, so the defendant asked to do not recognize the Moroccan judgement. Mr. DeJoria also indicated as a non-recognition ground the fact that Morocco does not enforce Texas decisions. this “reciprocity” ground for do not enforce a foreign judgment in Texas is discretionary, but in some previous cases Federal Court decided not to recognize judgement in case of non-reciprocity (ex: Royal Bank of Canada vs Trentham Corp.).
Texas District Court was convinced by the evidence presented by Mr. DeJoria and refused to give recognition of the Moroccan judgment. The Morroccan parties appealed the decision to the Court of Appeals for the Fifth Circuit. The Court of Appeals reverses the District Court’s judgement, because the Texas Plaintiff does not discharge the burden of proof.
With decision no. 14-51022, on 30.9.2015, the Court of Appeal deals with a description of Moroccan judicial system, which does not lack sufficient independence such that fair litigation in the country is impossible. The Texas Recognition Act does not require a foreign judicial system that can assure the same rights to the parties as an American one. The judgement debtor, to avoid foreign judgement’s enforcement, must meet the high burden of proof that foreign judicial system totally lacks in impartial tribunals or procedures compatible with due process. The Court of Appeal describe some different cases, as Bank Melli Iran vs Pahlavi, dealing on an Iranian decision, or Bridgeway Corp. vs Citibank, a case about the recognition of a suit rendered during the Liberian Civil War by a Liberian Court. In both these cases, the lack of impartiality was evident and unbridgeable.
In Dejoria vs Maghreb Petroleum case, DeJoria did not proof the existence of a sufficient lack of impartiality in the Moroccan judicial system to justify the non-recognition of a Moroccan suit. In further contrast with Pahlavi case, there is no record evidence of anti-American sentiment in Morocco. And “Morocco’s judicial system is not in a state of complete collapse”, as the Liberian one during Liberian Civil War, so the Moroccan judgements cannot be considered unenforceable as in Bridgeway case.
On the other hand, referring to the Texas Recognition Act’s provision on the prohibition to enforce a foreign judgement if the foreign court did not have personal jurisdiction over the defendant, the Court of Appeal deals with the two components of personal jurisdiction: service of process and amenability to jurisdiction. In this case, there was service of process: DeJoria received actual notice of the Moroccan lawsuit. This fact, in the opinion of the Court of Appeal, meets the bare minimum requirements of notice sufficient to enforce a judgement. There was also amenability of jurisdiction: under the Moroccan law, if the defendants has not a domicile or residence in Morocco, jurisdiction lay proper at the domicile or residence of the plaintiff. As in the present case. And also Texas standard deals with these provisions.
Furthermore, the non-reciprocity was not proved in this case. Maghreb Petroleum Exploration and Mideast Fund For Morocco, on the contrary, have identified the relevant statutory provision under Moroccan law and offered expert testimony that Moroccan courts would recognize American judgements and have routinely recognized other foreign judgements. The non-reciprocity ground of Texas Recognition Act authorizes derogation to general principle of foreign judgements’ enforcement only if the foreign State would not enforce the Texas judgements because they are rendered in Texas. Mr. DeJoria has not meet this burden, so the Court of Appeal could not refuse to enforce the Moroccan decision.
In conclusion, by this exhaustive explanation, the Court of Appeals pointed some important principles on recognition of foreign judgements in Texas. Even though this analysis deals with burden of proof’s distribution under the Texas Recognition Act, it is very detailed and analytical, so it could be an interesting starting point for future cases of lawsuit on foreign decisions’ enforcement in the whole U.S.A..