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27 Jan 2012

Mark Hamblett, New York Law Journal

Circuit Faults Use of State Law to Block Chevron Judgment [USA]

The intent of New York law, bolstered by the principles of international comity, denied Southern District Judge...Kaplan...the authority to block throughout the world the enforcement of a $17.2 billion environmental judgment secured against Chevron Inc. in Ecuador that the judge thought might have been obtained by fraud, a federal appeals court explained...[A] unanimous panel of the U.S. Court of Appeals for the Second Circuit dismissed a declaratory judgment complaint by Chevron..."Whatever the merits of Chevron's complaints about the Ecuadorian courts…the procedural device it has chosen to present those claims is simply unavailable: The Recognition Act nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor," Judge Lynch wrote. He said the act "and the common law principles it encapsulates are motivated by an interest to provide for the enforcement of foreign judgments, not to prevent them."...[T]he circuit said...judge [Kaplan] did not have the authority "to dictate to the entire world which judgments are entitled to respect and which countries' courts are to be treated as international pariahs."