Second Circuit Explains Its Decision Reversing The Grant Of Injunction To Enforce $18 Billion Award Against Chevron

Chevron Corp. v. Hugo Gerardo Camacho Naranjo, et al., No. 11-1150-cv(L), is the Second Circuit's decision explaining its ruling ealier in 2011 to reverse the District Court's grant of a preliminary injunction precluding any enforcement activities of an $18 billion judgment against Chevron by native Ecudorians for environmental liability entered by a court (and now affirmed) in Ecuador.

We have posted on this case several times (e.g., here and here, in the latter case reporting on the Second Cirtcuit's reversal elaborated on by the Panel). At this point in the appeal — when the Court is explaining its earlier ruling — the Court of Appeals articulated the issue as to whether Chevron could affirmatively use the Uniform Foreign Country Money-Judgments Recognition Act as enacted in New York. The Court of Appeals ruled that Chevron could not use the Act in a preemptive, anticipatory manner even if the judgment it was trying to avoid was allegedly fraudulently obtained (on which the Court of Appeals expressed no opinion).

The international practice aspects of the case, and of the current decision, are many.

First, the Court of Appeals was unwilling to weigh in on the fraud and misconduct allegations that are central to Chevron's claims, instead holding that the Act "nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor".

Second, the Court of Appeals found that "[c]onsiderations of international comity provide additional reasons to conclude that the Recognition Act cannot support the broad injunctive remedy granted by the district court". In passing the uniform statute and making it a part of New York law, "New York undertook to act as a responsible participant in an international system of justice — not to set up its courts as a transnational arbiter to dictate to the entire world which judgments are entitled to respect and which countries' courts are to be treated as international...