In The News

Dallas Lawyer's Focus on Litigation Fundamentals Helps Client Dodge $48M Judgment

May 14, 2021
Texas Lawyer

Dallas litigator Jamil Alibhai went back to the basics of due process, jurisdiction and contract language to win a case that helped his client, a gold-mining company, escape a $48 million judgment from Mexico.

“The law in the United States will always ensure due process, even when someone is trying to end-run it,” said Alibhai, a shareholder in Munsch Hardt Kopf & Harr. “Basic fundamental rights that companies have in litigation should be protected, and a Texas court will protect it.”

The large gold mine is owned by DynaResource, and Alibhai’s client, Goldgroup Resources Inc., had invested $18 million in the mining operation to get a 50% interest in return.

The business relationship eventually soured—they fought over management issues—and many years of litigation in Texas, Colorado and Mexico may now be winding to a close.

Judge Dale Tillery of Dallas County’s 134th District Court sided with all of Goldgroup’s arguments and dismissed litigation by DynaResource that sought to enforce its $48 million Mexican judgment, finding, among other things, that the Mexican judgment did not comport with due process of law.
“Goldgroup has established that the judgment and the cause of action on which the judgment is based is repugnant to the public policy of the state of Texas and the United States,” wrote Tillery in his findings of fact and conclusions of law.

It’s a long-running dispute that started in 2006 when Goldgroup invested in DynaResource’s mine in Mexico. The mining companies agreed that an arbitrator in Colorado would hear any disputes between them, said a ruling by the U.S. Court of Appeals for the Tenth Circuit, which decided another leg of the fight—Goldgroup won there, too.

DynaResource has fought that forum-selection provision, and another that required the parties to arbitrate their dispute, in a lot of litigation in Mexico, Texas and Colorado.

Eventually, an arbitrator sided with Goldgroup, a Colorado federal court confirmed Goldgroup’s award, and the U.S. Court of Appeals for the Tenth Circuit also affirmed the award.

But during the time the Colorado arbitration and litigation was still pending, DynaResource had success in one of its lawsuits in Mexico City. It won a $48.28 million default judgment against Goldgroup.

In December 2020, DynaResource filed a lawsuit in the 134th District Court in Dallas, where the company keeps offices, asking the Texas court to recognize the Mexican judgment.

Goldgroup argued that DynaResource should have filed the case in Colorado, since the companies’ contract picked that state to resolve disputes. Texas law would allow the Dallas court to reject the Mexican judgment, since Goldgroup won it by ignoring the contract’s forum-selection clause, argued the company.

The company said the Mexico judgment conflicted with the award that Goldgroup had won from DynaResource in Colorado, which was another reason the Dallas court could refuse to recognize the $48 million Mexican judgment. Among other things, Goldgroup argued the Dallas court should reject DynaResource’s lawsuit because the Mexican court never had jurisdiction over Goldgroup, and it wasn’t properly served with the lawsuit.

Tillery, the Dallas judge, sided with all of Goldgroup’s arguments in a final judgment.

However, the dispute is not over.

DynaResource filed a motion of appeal Friday, meaning the Fifth Court of Appeals will have to weigh in next.

Spencer Fane partner Gerrit Pronske of Plano, who represented DynaResource, didn’t respond to a call seeking comment before deadline.

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