On 13 August 2014, a US federal court declined to enforce a 123 million dollar judgment issued by a Moroccan court in 2009 against Texas native John Paul DeJoria. In Dejoria v. Maghreb Petroleum Exploration S.A. (W.D. Tex. 13 August 2014), the court laid out various reasons for refusing to recognize the verdict, focusing on the absence of an independent judiciary and the unlimited influence of the Moroccan royal family, especially King Mohammad VI, on the country’s judicial system.
In opining on Morocco’s judiciary, the federal court held that:
- The Moroccan court judgment was not rendered under a system that provides impartial tribunals and procedures compatible with due process. The court further explained that “[a] foreign judgment cannot be recognized in Texas if it was ‘rendered under a system which does not provide … procedures compatible with the requirements of due process of law.’”
- Moroccan judges are not independent and are susceptible to being pressured by members of the royal family. The court elaborated: “[n]ot only are all judgments rendered by Moroccan courts issued in the name of the King, but the King also presides over the Conseil Superieur de la Magistrature (High Judicial Council), which is the body that appoints, disciplines, and promotes judges. Additionally, per Article 24 of the Moroccan Constitution, the King appoints the Minister of Justice (MOJ). Given that the MOJ sits on the High Judicial Council, this gives the King considerable indirect influence over the makeup of the judiciary since “[t]he MOJ exercises significant influence over the appointment, discipline, transfer, and promotion of judges.” This fact “makes judges beholden to the MOJ not only for their initial appointment but for their continued job security as well, with obvious negative implications for judicial independence.”
Focusing on the issue of systematic corruption in Morocco, the court observed that even if the royal family does not engage in direct intimidation, judges fear retribution for entering rulings against members and friends of the monarchy. In other words: “Whether or not the King, Prince, or some other official picked up the phone and ordered the judge to find against DeJoria is, in some sense, beside the point. Even if no such phone call was ever made, the Court nevertheless cannot, in good conscience, conclude that Morocco provided Mr. DeJoria with adequate due process to warrant enforcement in this country.”
The federal ruling is important because of the arguments and evidence it relies on to demonstrate how the Moroccan king, his family, and associates are directly implicated in the absence of due process and an independent judiciary in the country. Coming from the United States, one of Morocco’s staunchest allies and defenders, the decision puts a dent in Morocco’s claims to regional exceptionalism and commitment to democratization and judicial reform.
Sure enough, the US judgment has been almost entirely absent from the Moroccan media. By touching on criticisms of the monarchy and its entourage, discussions of the ruling would have inevitably crossed a redline on freedom of speech in Morocco.
The 2009 Moroccan Court Judgment
The Washington Post and Hespress were among the very few news outlets to cover the US court’s refusal to enforce the 2009 Moroccan judgment. The plaintiff in the US case was John Paul DeJoria, a successful businessman from Austin, Texas. DeJoria filed a motion for non-recognition of a foreign judgment in the United States District Court for the Western District of Texas. The defendants, listed as John Doe #1 and #2 represent two companies—Maghreb Petroleum S.A (MPM), based in Morocco, and the Mideast Fund for Morocco Limited (MFM), based in Lichtenstein.
Together with DeJoria, MPM and MFM had been partners in a “Moroccan oil venture.” The partnership fell apart over claims that Dejoria and some of his associates mismanaged the venture and “fraudulently represented the value of their company to induce MPE/MFM to invest in it.”
DeJoria became involved in the oil exploration venture, through his investment in an American company called Skidmore Energy, which was operating in Morocco, from 1998 to 2001. To facilitate its operations, Skidmore Energy “formed and capitalized” a Moroccan corporation called Lone Star Energy Corporation (“Lone Star”) “to develop energy resources in Morocco.” According to Moroccan law, at least one shareholder had to be a Moroccan citizen. For Lone Star Energy Corporation, Prince Moulay Abdallah Alaoui, King Mohammed VI’s first cousin, served in this role.
In March 2000, Lone Star and the Kingdom of Morocco agreed to an investment partnership. Lone Star would make hydrocarbon investments in the country in exchange “for obtaining mineral rights concessions and other benefits from Morocco.” The value of Lone Star’s investment was around 150 million dollars.
On June 20, 2000, DeJoria and a business partner were present at a White House Dinner honoring King Mohammed VI. That same year, he met with the king, Prince Moulay Alaoui, and Mohammed Benslimane, brother-in-law of Prince Moulay Hicham. They “discussed the need for Lone Star to secure more funding to support its rapidly expanding drilling projects. At that meeting, DeJoria claims that the King assured him that he would line up investors for Lone Star and that funding would not be an issue for the company going forward.” In August 2000, various investors did indeed line up to take part in the hydrocarbon exploration, including Armadillo holdings, which was based in Lichtenstein and would later become MFM.
On 20 August 2000, King Mohammed VI made an announcement about opportunities for oil exploitation in Morocco. The Moroccan Ministry of Energy also claimed that enough oil had been found to “supply the Kingdom for roughly thirty years.” These claims were quickly exposed as false, damaging both the king’s image and the profitability of Lone Star’s oil venture. These misunderstandings, together with a series of public relations mishaps, led to the unraveling of the business venture between Lone Star, MFM and MPM.
At this point, DeJoria and another business partner quickly left Morocco, claiming their lives were in danger. Other investors believed their departure was meant to avoid legal liability in Morocco and “having to answer for Skidmore’s fraudulent charges.” Indeed, MFM soon brought suit against Skidmore, as well as against DeJoria and various other individuals.
In the suit, MFM claimed that, “Skidmore fraudulently induced it into investing in Skidmore by misrepresenting the true extent of Skidmore’s investment in Lone Star.” (Dkt. No. 6, Ex. 1). According to Plaintiffs in the suit, Skidmore’s fraudulent representations deprived Lone Star of the capital the company needed to fund ongoing business operations…” Skidmore responded with a series of “frivolous lawsuits” against various investors, including MPM and MFM, which were all quickly dismissed.
The Moroccan court ruling came seven years after the beginning of court proceedings in 2002. The judgment was in favor of Maghreb Petroleum S.A. (MPM), whose shareholders included the king’s cousin, and MFM.
A Long History of Systemic Corruption
The DeJoria case highlights Morocco’s governance issues, more generally, and the deep seeded problems facing the Moroccan judicial system, more specifically.
King Mohammed VI addressed the notion of reforming Morocco’s judicial system during a 2009 speech, citing the systemic corruption that plagues the country at every level and the need for a more professional and independent judiciary. At the time, the World Corruption Index had for many years listed Morocco as one of the most corrupt countries in the world. In 2010, the European Union withdrew its aid packages for Morocco’s judicial reform process, after it became clear nothing was changing despite the king’s call for action.
In October 2012, 1000 Moroccan judges from the “Judges Club,” a judicial reform groups established in 2011, staged an unprecedented protest calling for an independent judiciary and an end to corruption. Over 2000 judges signed the group’s petition. In its decision, the US federal court cited the event as evidence of the lack of judicial independence in the Morocco.
In September 2013, Minister of Justice Mustapha Ramid announced a sweeping judicial reform package spearheaded by the Islamist government and backed by the king, which “include[ed] higher standards and more training for judges, prosecutors and lawyers, as well as greater transparency in appointments and penalties on members of the judiciary.” The reform charter “also talks about setting up a mechanism to oversee judges’ expenditures and lifestyles to ensure they are in line with their income.”
The project’s centerpiece called for moving the prosecutor’s office from the Ministry of Justice to the Court of Cassation, in order to increase its independence from the government. But, as Abdelilah Benabdessalam, vice-president of the Moroccan Association of Human Rights, rightly argued, “We cannot really speak about a real independence of the judiciary when the king appoints the principle official of the Court of Cassation at the Supreme Council of the Judiciary.”
Implicating, as it does, pervasive corruption within the legal system and economy, as well as the unchecked influence of the king, judicial reform has often been pushed aside for other priorities or superficial reforms to appease international and domestic critics. In the latest iteration of Morocco’s constitution, approved by ninety-eight percent of voters in June 2011, the king offered a series of political reforms lauded by the international community. These so-called concessions came in response to the 20 February movement, Morocco’s "Arab Spring" protests that called for a constitutional monarchy, decentralization of power, greater freedom of expression, and the release of political prisoners.
At the center of these calls for reform lies the need to improve democracy, human rights, and the rule of law. In a country like Morocco, however, these changes are inherently tied to limiting the pervasive influence of the royal family, especially the king. The monarchy’s systemic power over the judicial system and the economy represents a great hurdle to establishing a democratic system based on the rule of law in Morocco.
Unmasking the Monarchy
Briefings from the US court case are readily accessible to Moroccans via the Washington Post website. This is important, as such a comprehensive overview of the unchecked influence of the palace, and its preeminent role in Morocco’s crippling cycle of corruption, has rarely been displayed so clearly and with such strong evidence. Of particular significance, the US court decision cited the impossibility of receiving an independent judicial ruling in Morocco when a member of the royal family is involved in a case. In this way, the ruling not only draws attention to the Moroccan government’s hypocrisy on human rights. It also highlights the monarchy’s unlimited and negative influence over the political system, the economy, and the rule of law.
[This article was originally published on Muftah.]