LGST 219 - Class 15 Notes

LGST 219 - Class 15 Notes - CLASS 15 (Nov. 2): Recognition...

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CLASS 15 (Nov. 2) : Recognition and Enforcement cont. 1] Chevron's Ecuador Case : 18 billion dollar award from a court in Ecuador against Chevron. a. Do we have a legal basis for denying recognition and enforcement to this historic award? b. Do American courts have an obligation to address legal rights obligations from courts overseas? Can they throw them out on the basis of foreign non-conveniens? c. Texaco fought very hard to get the case dismissed and it won. The case was out of the legal system. d. But the Ecuadorian courts did pursue it anyway and came out with this 18 billion dollar award. e. Sometimes a forum non conveniens can backfire. This was what happened in the Bhopal case. 2] Brussels 1 regulation. a. One of the grounds for challenging an arbitral award was improper panel constitution. b. But if an arbiter makes a mistake in applying the law, this would not be grounds for challenging the decision in a court. 3] Parsons Case (recognition and enforcement: forum vs. foreign policy/ force majeure issues) : a. Foreign arbitral award violates forum policy. b. Parsons says forum policy is the same as foreign policy. c. Can Parsons convince the U.S. courts that they should block the enforcement of a foreign arbitral award? d. Yes if the foreign arbitral award violates forum policy, in a case where forum policy is foreign policy. e. This foreign policy problem constituted a force majeure defense . (e.i) Force majeure - impediment beyond your control that you cannot overcome. So you're excused by reason of force majeure to not uphold the contract. a. What happened here was the deterioration of US relations with Egypt. There was a war between Egypt and US and therefore Parsons used this as an excuse for not complying with the contract to build a factory in Egypt.
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f.So the Egyptian party took Parsons to arbitration. The forum clause had selected arbitration in the ICC (International Chamber of Commerce). g. The ICC says that you had a force majeure defense for 34 days due to the war and bad relations when you could not carry out your contractual obligations. But this was temporary. After the end of this period, you were capable of carrying out the project. h. Parsons lost in the ICC and the Egyptian company comes to the US to collect. i. Parsons tries to defend by saying the arbitral award violates forum policy . Parsons says that foreign policy is part of forum policy. j.The court says that forum policy is different from foreign policy. Forum policy is about fairness, justice, and morality. We don't see there's any violation of forum policy. k. Parsons then says that they didn't have an opportunity to present our defense. Arbitration was not delayed to wait for the witness that couldn't show up. (k.i)
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This note was uploaded on 01/11/2012 for the course LGST 219 taught by Professor Anne.mayer during the Fall '11 term at UPenn.

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LGST 219 - Class 15 Notes - CLASS 15 (Nov. 2): Recognition...

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