International Business Law Advisor : Miami International Business Lawyer & Attorney : Santiago Cueto Law Firm : Florida and Global Business Litigation

Dear Hague Evidence Convention:

This letter pains me. In the past several weeks I’ve written several posts extolling the virtues of your convention siblings governing serving process abroad and legalizing documents for use overseas-- the Hague Service Convention and the Hague Legalization Convention.

These two conventions have worked very well to simplify and streamline areas that were previously cumbersome and time consuming.

Black Sheep of Hague Convention Family

However, I take exception with you, Hague Evidence Convetion, the black sheep of the Hague Convention family.

Although your purpose and mission was to reconcile the differing legal philosophies of the Civil Law, Common Law and other systems with regard to the taking of evidence, in practice you have been largely ineffective for U.S. litigants and other signatories.

Yes, I know. Given your status as a ratified treaty, you stand on par with the Federal Rules of Civil Procedure and other federal statutes as "the supreme law of the land" in this country.  I’ve heard it all before. 

I Thought You Were Special

I’ll never forget when I first heard that you’re comprised of three chapters: the first concerning Letters of Request; the second involving the use of Diplomatic Officers, Consular Agents and Commissioners to obtain evidence; and the third containing provisions of general application and certain relevant exclusions.

Not one. Or two. But THREE whole chapters dedicated to harmonizing international evidence rules!

It seemed as if I had won the international evidence gathering lottery.  Surely, my days as a frustrated international evidence gatherer were over--no more Letters Rogatory!

Betrayal

But then I read your Article 23, which lets member states opt out of pre-trial discovery.  I almost tore a service convention apostille in half when I learned that most of your signatories have made such declarations, severely limiting the efficacy of your mechanisms on U.S. litigants who live and die by pre-trial discovery.

Further rendering you largely ineffective, is Article 33, which lets member states opt out of the deposition mechanisms provided for in Chapter 2. No surprise here, a number of contracting states have also expressly limited, or excluded in whole, this method of discovery.  

When the reality hit that your Article 23 & 33 exceptions for all intents and purposes, rendered you fruitless and that I’d soon return to my local rules of evidence, I was overcome with guilt. How could I have considered leaving the ever loyal and faithful federal discovery mechanisms?

Redemption

Federal Rules 26 and 34, for example, have proven to be invaluable in getting documents located outside the U.S.  And federal statutes such as 28 USC § 1782, have been an extraordinary resource in obtaining U.S. sourced documents in aid of foreign proceedings.

Sure there are some issues that arise sometimes and they do not always work, but by and large, the federal discovery mechanisms are more than sufficient for my international evidence gathering needs.

Thanks for Nothing, Hague Evidence Convention. I'm sticking with the Federal Rules.

     -Santiago

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**Update January 15, 2010**: The Republic of Ecuador and the class Plaintiffs have both challenged Chevron's arbitration claim in New York federal court. You can read about it here and here.

First, the United States. Then Ecuador. Now Holland. Chevron's wanderlust knows no bounds, as it recently filed a parallel international arbitration proceeding in the Hague (Holland).

The Arbitration Claim

As reported in this article in the Wall Street Journal and in this article in the New York Times,  Chevron filed an international arbitration claim before the Permanent Court of Arbitration in The Hague under the Rules of the United Nations Commission on International Trade Law (UNCITRAL). The claim is based on Ecuador's alleged violation of investment agreements, international law, and its treaty with the United States--the Encouragement and Protection of Investments Treaty.

Chevron’s claims relate to the Amazon oil lawsuit I wrote about in an earlier post.  In the arbitration filed in the Hague, Chevron alleges that Ecuador’s judicial process is broken and that the South American nation cannot fairly adjudicate the long-running oil pollution litigation.

Through the filing, Chevron seeks to enforce prior settlement and release agreements that the government of Ecuador entered into with Texaco Petroleum when the consortium was terminated, and to hold Ecuador accountable for its obligations under Ecuadorian law and existing international treaties.

Forum Shopping in the Hague Must be Condemned

Chevron's latest move is the litigation equivalent of three card monty and is yet another tactic to divert attention away from the trial taking place in Ecuador. Filing an international arbitration campaign at this point in time smacks of desperation and is a clear example of forum shopping, as Plaintiffs counsel Steven Donziger stated in this Reuters article.

Chevron first fought successfully to force plaintiffs to try their lawsuit in Ecuador rather than U.S. courts. Then it sought (unsuccessfully) to win indemnification in U.S. courts from a possible judgment in Ecuador. And now it's filed for arbitration seven thousand miles across the Atlantic in Holland. 

The Hague is arguably the most hallowed institution for the resolution of high-profile international disputes. Chevron's latest tactic all but mocks the institution's primary mission to administer justice. The Hague must not be utilized to frustrate legitimate legal proceedings taking place elsewhere.

Forum Shopping Creates Broad Incentives for Abuse

As Chevron's arbitration claim illustrates, the opportunity for one party to game the system and manipulate the outcome of a case by choosing a specific forum over another creates broad incentives for abuse. Among other things, forum shopping :

1. creates legal uncertainty (particularly for the defendant);
2. drains resources by imposing substantial additional costs on defendants, who must transport lawyers, documents, and numerous witnesses to the site of the trial – an expense that is multiplied when the trial is located far from the defendant’s place of business.
3. undermines the authority of substantive state law by calling into question the equity of the legal system.

Although under extremely limited circumstances forum shopping may prove a legitimate means to achieve a more just result, it is disproportionately utilized to avoid a just result by exploiting the points outlined above--as Chevron has done.

Conclusion

While an attorney's obligation to zealously advocate his clients' interest may involve forum shopping as part of the procedural calculus, the obligation must be tempered with a keen understanding of what becomes abusive litigation.

Trend to Watch: Given the High Profile Nature of Chevron's Claim, Look for an Increase in Similar Filings in the Hague

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