The recent Ontario decision in Amtim Capital Inc. v. Appliance Recycling Centers of America, 2013 ONSC 4867 (Ont. S.C.J.) [“Amtim Capital”] highlights the limits of judicial comity in international litigation and to what extent a default judgment in a foreign court will operate as res judicata, issue estoppel or abuse of process. It also provides insight into how most Canadian judges take a dim view of forum shopping. (more…)
Archive for the ‘comity’ Category
Some have suggested that US courts should not deny recognition and enforcement to foreign judgments on grounds of fraud or a denial of due process in the particular foreign proceeding, as long as the foreign judiciary is systematically adequate. This paper, based on remarks given at the University of Pennsylvania Journal of International Law’s Fall 2012 Symposium, evaluates that suggestion by considering the various kinds of comity that US courts accord to one another, in particular, the comity required by the Full Faith and Credit Clause and the comity a federal court gives to a state court in habeas corpus cases. It outlines the ways in which each of these two models of comity can be a model for US treatment of foreign court judgments, and it considers recent decisions in which US courts have shown a tendency to use a more deferential model of comity when considering whether to recognize foreign judgments.
Download a copy of the paper via SSRN here.
Alan Scott Rau (University of Texas at Austin School of Law; University of Texas – School of Law, The Center for Global Energy, International Arbitration, and Environmental Law) has posted “The Errors of Comity: Forum Non Conveniens Returns to the Second Circuit”, American Review of International Arbitration, Forthcoming August 2012/Energy Center Research Paper No. 12-04. Here’s the abstract:
What a federal court is expected to do when asked to enforce a foreign arbitral award — what constraints the Conventions impose on its normal course of adjudication — is of course a vast question. But there is one small piece of the puzzle that recurs frequently, and which has in particular been troublesome to the Second Circuit.: What remains of the inherent power of a common-law court to defer or dismiss litigation of a Convention case on the grounds that it constitutes an “inconvenient” forum?
A decade ago a federal district court in Monde Re, “relying on the doctrine of forum non conveniens,” dismissed a petition to confirm a foreign arbitral award, and the Second Circuit affirmed. The received wisdom ever since has been quite hostile — uniformly to the effect that the obligations imposed by the New York and Panama Conventions make any recourse to the doctrine inappropriate. Despite the fact that the Convention in art. III allows contracting states to continue to use their “rules of procedure” in recognizing or enforcing foreign awards, that is a category of very weak explanatory power: While litigants may have to take local courts as they find them, the one thing art. III cannot be intended to do, is to permit local courts to devise rules that compete with, or undermine, or put up obstacles to, the rules of decision under which the Convention expects them to assess the legitimacy of awards.
Now in Monde Re itself the respondent, the state of Ukraine, had not been a signatory to the contract nor did it participate in the arbitration: Its defense — “I was never a party to any agreement to arbitrate” — would indeed constitute an art. V ground for the refusal of recognition and enforcement. The inquiry then becomes, “just how do we go about answering the question?” — or more precisely, “just who is best placed to evaluate whether these ‘grounds’ are present? Or perhaps, “just who is to make the decision?” It is a familiar notion that the grounds for decision, and the identity of the appropriate decisionmaker, are likely to call for entirely distinct inquiries, and it seems plausible to say that the former may be so intertwined with the need to obtain foreign-source evidence, and with the need to assess foreign law, that it may become prudent to defer the decision to a foreign court.
But by contrast the Second Circuit’s latest venture into the area, in Figueiredo Ferraz, is astonishing: Here the court deferred the enforcement of a Peruvian award on the basis of the “public interest factors” called for in the usual forum non conveniens analysis — and these “factors” did not refer in any way to any supposed difficulties a U.S. court might face in establishing the identity of the “proper party.” Instead the “public interest” was entirely that of Peru, for Peruvian legislation imposed a limit on what a government agency was permitted to pay annually in satisfaction of a judgment against it. Apparently such “public factors” were closely congruent with considerations of international comity. But none of this even comes close to being an art. V ground for the refusal of recognition and enforcement, and in a Convention case the usual recourse to a court’s “discretion” must be foreclosed: While by its terms the Convention may allow a contracting state to enforce awards even where the canonical art. V grounds are present, it extends no leeway whatever to refuse to do so when they are not.
Whether on a motion to confirm a Convention award — or at an earlier stage on a motion to stay litigation or compel arbitration — a doctrine of forum non conveniens must in the structure of our law have only the most marginal presence. Anything more robust would be in considerable tension with the goals of the Convention to increase the currency of awards by limiting challenges and expediting enforcement. But although forum non must play a slender role of only intermittent interest, it has a role nonetheless, whenever a Convention defense is in play and the identity of the appropriate decisionmaker is in doubt. The trick is to preserve the classic virtues of prudence and restraint and economy of means in adjudication, while at the same time managing to respect the structure of the Convention, and being alert to the policies in support of the arbitral process that the Convention seeks to advance.
A pdf copy of the article is available for download via SSRN here.
For those interested in the Chevron/Ecuador case, I have written a guest post over at Letters Blogatory on the recent enforcement action filed by the Lago Agrio plaintiffs in Ontario: Guest Post: Comments on the Lago Agrio Plaintiffs Enforcement Action in Canada.
- Chevron-Ecuador Fight Comes to Canada (businessweek.com)
- Chevron Statement on Ecuador Judgment Enforcement Action (Financial Post)
- For Fourth Time, Ecuador Appellate Denies Chevron Attempt to Block Enforcement of $18 Billion Judgment, Says Amazon Defense Coalition (prnewswire.com)
- Ecuador plaintiffs file lawsuit in Canada against Chevron to enforce $18 billion judgement (vancouversun.com)
- A Hopeful Turn in the Chevron-Ecuador Fight (businessweek.com)
- Case Conditionally Dismissed on Forum Non Conveniens Grounds Even In the Face of Blocking Statute in Chosen Non-U.S. Jurisdiction (internationalpractice.org)
- District Court in Chevron v Donziger Upholds Many Claims, Including RICO Claim Against U.S. Lawyer, Despite Thus-far Valid Non-U.S. Judgment (internationalpractice.org)
- Ecuadorans seek $18.2 billion damage judgment against Chevron in Ontario courts (thestar.com)
- Chevron Lawyer Claims that Victims of Rainforest Contamination Are “Irrelevant” — Amazon Defense Coalition (prnewswire.com)
- Move against Chevron in Canada first of many: Ecuadorean plaintiffs (theglobeandmail.com)