Feb 282012

Attorneys routinely assist clients in disputes with business entities; however, when the business entity involved is a foreign-based company or subsidiary, successfully resolving the dispute may be more complicated than you think.

Many foreign companies have offices and assets in the United States, but many do not have substantial US-based holdings (i.e. cash and other assets).  When this occurs, American plaintiffs often have limited options.

Many US plaintiffs sue a foreign-based company in a United States court.  If the plaintiff wins, there are legal safeguards to assist in collecting their judgment, but they are not always beneficial.  Often, even after the plaintiff attempts to enforce the judgment under international treaties, the plaintiff is left empty-handed.

Before entering a substantial transaction or business relationship with a foreign entity, it can be beneficial to dutifully research whether the company is foreign-based and whether or not they have a substantial presence within the United States.  This type of due diligence is especially important when conducting transactions on-line.

If you find yourself in a dispute with a foreign-based entity, it may be beneficial to consult a knowledgeable attorney dealing in litigation with foreign-based companies.   They will be able to help you determine whether you have a high probability of collecting a judgment, should you be victorious in court.

The information in this blog post is not intended to serve as legal advice or as a guarantee, warranty, or prediction regarding the outcome of any legal matter.  The information is subject to change and may be incomplete and/or contain errors.  Do not rely on this information without consulting a qualified attorney to discuss the specific facts relating to your case.

Sep 202010

Ecuadorian judge Leonardo Ordonez has declared the conclusion of the Chevron trial.  The judge is set to consider the evidence and make a ruling by March 2011.  Mercedes Alvoro covers the story for the Wall Street Journal.

This case has stretched two continents and multiple jurisdictions since 1993, and a ruling by the Ecuadorian judge will not be the end of the case.  Even if the Ecuadorian judge rules in favor of the plaintiffs, there will be multiple appeals, and any final judgment must be enforceable in a jurisdiction where Chevron has sufficient assets (i.e., the United States) to fulfill the judgment.

Continuing issues of relevance in the case include the fraud claims made by Chevron and the plaintiffs, choice and conflicts of laws analysis, and how to get a foreign judgment enforced by a US court.  The latter issue is often one of great concern.  After all, what good is a paper judgment if it cannot be enforced?

Enforcement of foreign judgments is a tricky issue, but there are some great texts on the topic.  Later this week I will highlight some of them, including a great book by Professor Robert E. Lutz.

Meanwhile, all eyes in this case are on judge Ordonez and the many judges hearing claims in US courts.

Aug 172010

In late March, I posted a brief news update regarding the Ecuadorian government’s rejection of a $700 million arbitration award against the South American Nation.  The award stemmed from Chevron’s claim that Equador failed to pay for oil during the 1990′s.

In the meantime, things have gotten more interesting.

Chevron is a defendant in the Ecuadorian court for Texaco’s (now part of Chevron) alleged waste dumping in Equador.  The suit has been brought by Ecuadorian Indians, and Chevron claimed that “attorneys for the Ecuadorian plaintiffs… have been secretly colluding with the ostensibly neutral-court appointed expert… Richard Cabrera.”  (See CNN for more)

Chevron points to Joe Berlinger’s documentary “Crude” as evidence of fraud.  The documentary allegedly chronicles the case, and key Ecuadorian figures appear in the documentary, including Richard Cabrera.  A portion of the documentary’s outtakes can be found on YouTube.

Why is this so interesting to me?  Well, I was surprised that someone at Chevron noticed my post.

In response, Chevron representatives e-mailed me the following statement and link on August 3.  It describes Chevron’s request to preserve and obtain records from the documentary so that Chevron can investigate alleged fraud by the Ecuadorian government.

In a filing made late today with a U.S. federal court, Chevron has submitted outtakes from the movie Crude, documenting pervasive corruption and fraud on the part of the Lago Agrio plaintiffs’ lawyers. In the filing, Chevron is asking the court to order the preservation of all records so that the full extent of the fraud can be investigated.  We are also seeking to expand the scope of the information sought based on the revelations in the outtakes.  It is obvious that the plaintiffs’ lawyers and their associates have engaged in an illegal scheme to corrupt the proceedings in Ecuador.  The evidence submitted today shows beyond any doubt that there is no basis for an award of damages against Chevron, much less the fraudulent $27 billion assessment pending before the court in Ecuador.

The filing can be found here: http://shopfloor.org/wp-content/uploads/2010/08/Chevron-filing-8-3-2010.pdf

A federal judge ordered the filmmaker to turn over footage to Chevron.

More to come…

Mar 312010

A brief news update… Today the government of Ecuador rejected a $700 million dollar arbitration award Chevron obtained against the South American nation.

The Financial Times of London [registration required] reports:

An international arbitration tribunal in the Hague on Tuesday awarded Chevron, the US oil company, $700m in a claim against Ecuador stemming from allegations that the country failed to pay for millions of barrels of oil in the 1990s…

The arbitration panel found that Ecuador had violated the Treaty through “undue delay of the Ecuadorian courts,” thereby failing to provide effective means of asserting claims and enforcing rights.

It awarded Chevron approximately $700m in principal damages and interest, as of December 22 2006, pending further proceedings to determine applicable taxes, compound interest, and costs.

The ruling is a setback for Ecuador, which has pulled out of the World Bank’s arbitration programme – the second country ever to do so.

Chevron’s claims derive from a 2006 exchange between Texaco [now Chevron] and Ecuador under a US-Ecuadorian Investment Treaty, interpreted under UNCITRAL rules.

The judgment does not include Ecuadorian claims against Chevron for environmental damage.

Mar 012010

It could happen, primarily in reaction to the United Kingdom’s hostile libel laws.

England’s stringent libel law places the burden of proof on the defendant, making British courts  a desirable venue for defamation plaintiffs.  The result is expensive litigation and a unusually  high number of defamation judgments in favor of the plaintiff.  Parliament is currently reviewing England’s archaic libel law in reaction to inefficiency and foreign hostility.

The US Congress is considering prohibiting enforcement of foreign defamation judgments,  which is causing reverberations across the Atlantic.  According to the Washington Post:

“Over the years, England has attracted waves of aggrieved plaintiffs, from U.S. celebrities to  Ukrainian businessmen, who have sought to use English laws that make libel defense difficult  and expensive. (Welsh libel laws are the same as England’s; Scotland and Northern Ireland have their own procedures.) The burden of proof here is on the defendant, not the plaintiff — just the opposite of U.S. law. The U.S. Congress is considering legislation that would prohibit enforcement of libel judgments from outside the United States, a move aimed at England. The proposal follows the lead of several states, including New York, home to many prominent publishers, which have already adopted similar laws.”

Will either Parliament or Congress act?

The complete Washington Post article can be found here.