Monday, 7 April 2014

SCC to hear Chevron’s Appeal in Mammoth Equadorian Judgment Enforcement Case

             The Supreme Court of Canada has given leave to appeal the decision of the Ontario Court of Appeal allowing the plaintiffs, villagers in Equador, to pursue their action for enforcement of their $9.5 billion foreign judgment against Chevron in Ontario:  Chevron Corp v. Yaiguaje et al.   

            The Court will be asked to rule on, among other things, whether the real and substantial connection test is a universal test for jurisdiction simpliciter that applies even to recognition and enforcement of foreign judgments.  Chevron apparently says that the test does apply.  If the test applies, would that test be made out where the sole connection between Canada and the foreign judgment debtor is an indirect Canadian subsidiary?     Is the presence of exigible assets a prerequisite to recognition? 

Under the present law, the test for jurisdiction in a recognition and enforcement case focuses on whether the foreign court that issued the judgment had jurisdiction over the defendant, in accordance with Canadian jurisdictional principles.  A real and substantial connection between the foreign case and Canada is not a prerequisite for jurisdiction to hear a recognition and enforcement action.   That real and substantial connection test applies only to determinations as to whether a Canadian court can assert jurisdiction over a non-resident defendant in the original action, not enforcement of a judgment against that defendant.  A ruling that the real and substantial connection test does apply to recognition and enforcement of foreign judgments would be an abrupt departure from the clear trend toward the liberalisation of the requirements for recognition and enforcement that started with Morguard v De Savoye in 1990.