Foreign judgments, judicial trailblazing and the cost of cross-border complexity: thoughts on Chevron Corp v Yaiguaje

Abstract

This commentary examines the decision in Chevron Corp v Yaiguaje, which was released by the Supreme Court of Canada (SCC) on 4 September 2015. In the case, the SCC considered whether a Canadian court had jurisdiction to recognise and enforce a US$9.51bn judgment against Chevron (and its wholly owned subsidiary), which was issued by an Ecuadorian court. The SCC held that it did. It reasoned that there was no requirement for a real and substantial connection between a foreign judgment debtor (or the dispute from which the judgment arose) and a Canadian court before such a court has jurisdiction to recognise and enforce a foreign judgment. As a result, it appears that Canadian courts may be applying the low domestic standard for recognising awards from another province to awards from foreign countries. The fallout from this case will prove to be divisive. Human rights advocates will celebrate this case, hoping that it signals that Canadian courts will be taking a more active role in holding extraction companies accountable for human rights violations and environmental damages abroad. Sceptics will fear this case, believing that Canada's new role as a judicial trailblazer will come at a cost, discouraging foreign investment and potentially undermining international relations.