DeJoria v. Maghreb Petroleum Exploration, S.A., No. 14-51022 (5th Cir. Sept. 30, 2015) [click for opinion]

Appellants Maghreb Petroleum Exploration, S.A. and Mideast Fund for Morocco, Limited sought recognition under the Texas Uniform Money Judgment Recognition Act (the “Act”) of a 2009 Moroccan judgment for (under then-current exchange rates) $123 million against Appellee John Paul DeJoria, a Texas resident. The Moroccan judgment was based on a failed oil venture in Morocco that included close relatives of the Moroccan King and was promoted by the King himself. The judgment was issued after several years of proceedings in the Moroccan court in which DeJoria did not participate.

The parties filed cross motions for recognition and nonrecognition in federal district court in Texas. In his motion for nonrecognition, DeJoria raised several of the grounds for nonrecognition set forth in the Act. These included 1) lack of due process for DeJoria in the Moroccan court system; 2) lack of personal jurisdiction by the Moroccan court over DeJoria due to improper service; and 3) lack of reciprocal enforcement of judgments between Morocco and Texas.

After extensive evidentiary submissions and briefing, the district court granted DeJoria’s motion for nonrecognition. The court concluded that DeJoria could not receive due process or a fair trial in Morocco because of the combination of the King’s involvement in this case and the King’s control over the judicial system. The district court did not address DeJoria’s other grounds for nonrecognition.

Applying a de novo standard of review, the Fifth Circuit reevaluated the evidence and reversed the district court’s judgment, remanding for further proceedings. Noting the high burden to justify nonrecognition on due process grounds, the court held that the judgment debtor must prove that “fair litigation in Morocco is impossible” so as to justify “routine non-recognition of the foreign judgments.” The court went on to compare Morocco’s judicial system favorably to those of Iran and Liberia which, inBank Melli and Citibank, respectively, had been found to be so wanting in due process protections as to justify nonrecognition of their judgments.

DeJoria has filed petitions for en banc and panel rehearing, which are pending.

Nick Kennedy and Brian Hurst of the Dallas office contributed to this summary.