DeJoria v. Maghreb Petroleum Exploration S.A., No. 13-cv-654 (W.D. Tex. Aug. 13, 2014) [click for opinion]

DeJoria, an American billionaire, invested in an oil exploration project in Morocco.  The Moroccan royal family allegedly obtained a stake in the venture through a cash infusion from a Liechtenstein entity controlled by King Mohammed VI’s cousin.  Disappointing results from the venture’s first well, perceived to be embarrassing to the King, led the Moroccan interests to expel DeJoria from the venture and sue him and another American investor alleging fraudulent representation of the venture’s value and mismanagement of the venture.  DeJoria did not appear to defend, and a Moroccan court ultimately entered judgment against him and the other American investor for approximately $123 million.

DeJoria sued the Moroccan judgment creditors in the U.S. District Court for the Western District of Texas seeking a declaration that the Moroccan judgment was unenforceable on several due process and procedural grounds.  The Moroccan creditors counterclaimed for recognition of the judgment.  The court held that the Texas Uniform Foreign Country Money Judgments Recognition Act precluded enforcement of the Moroccan judgment because it was rendered under a system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law. 

Pointing to the King’s involvement in the appointment, discipline, and promotion of Moroccan judges, the monarchy’s direct intervention in the outcomes of certain civil cases, and recent protests by the Moroccan judiciary complaining of a lack of independence, the court observed that “the Moroccan royal family’s commitment to the sort of independent judiciary necessary to uphold the rule of law has and continues to be lacking in ways that raise serious questions about whether any party that finds itself involved in a legal dispute in which the royal family has an apparent interest—be it economic or political—in the outcome of the case could ever receive a fair trial.”

The court also relied upon evidence of the King’s efforts to shape the public’s perception of his and DeJoria’s respective roles in the venture through intimidation and repression of Moroccan media.  The court stated that “[a]ny judge presiding over DeJoria’s case would have had to ignore either an explicit or implicit threat to his career—if not to his safety and well-being—in order to find against [the Moroccan interests].”  Finding “no conceivable set of facts or circumstances in which DeJoria could have prevailed in the underlying case,” the court concluded that the Moroccan court proceedings were fundamentally unfair and failed to provide DeJoria adequate due process.

[Brian Hurst, Michael Pollard, David Zaslowsky, Nicholas Kennedy and Eugenie Robichaux of Baker & McKenzie were counsel for DeJoria]

Eugenie Robichaux of the Dallas office contributed to this summary.