ROCKVILLE, Md., Oct. 7, 2015 /Standard Newswire/ -- On September 30, 2015, the U.S. Court of Appeals for the Federal Circuit entered judgment in JOHN PAUL DEJORIA, v. MAGHREB PETROLEUM EXPLORATION, S.A.; MIDEAST FUND FOR MOROCCO, LIMITED, in favor of MOROCCO.

John Paul DeJoria ("DeJoria") was a major investor in an American company called Skidmore Energy, Inc. ("Skidmore"), which was engaged in oil exploration and technology projects in Morocco. In pursuit of its goals, Skidmore formed and capitalized a Moroccan corporation, Lone Star Energy Corporation ("Lone Star") (now Maghreb Petroleum Exploration, S.A., or "MPE"). Corporations established under Moroccan law are required to have a "local" shareholder.

In March 2000, Lone Star entered into an "Investment Agreement" obligating it to invest in hydrocarbon exploration in Morocco. The King of Morocco assured DeJoria that he would line up additional investors for the project to ensure adequate funding. Armadillo Holdings ("Armadillo") (now Mideast Fund for Morocco, or "MFM"), a Liechtenstein-based company, agreed to make significant investments in Lone Star.

In the negotiations leading up to this agreement, Skidmore represented to Armadillo that Skidmore previously invested $27.5 million in Lone Star and that Lone Star's market value was roughly $175.75 million.

The oil reserves were not as expected and the business relationship between Skidmore/DeJoria and Maghreb Petroleum Exploration S.A. suffered tremendously.

After nearly seven years of considering MPE and MFM's suit, the Moroccan court ruled against DeJoria and Gustin but absolved five of their co-defendants—including Skidmore—of liability. The court entered judgment in favor of MPE and MFM for approximately $122.9 million.

DeJoria sued MPE and MFM in Texas state court, challenging domestic recognition of the Moroccan judgment DeJoria asserts, as mandatory grounds for non-recognition of the Moroccan judgment, that the Moroccan judicial system does not provide due process and that the Moroccan court lacked personal jurisdiction.

DeJoria also asserts, as a discretionary ground for non recognition, that the Moroccan judgment should not be recognized because Moroccan courts do not recognize Texas judgments.

However, the case did not stop at the Texas court and went to the U.S. Court of Appeals for the fifth circuit which stated that "the record does not establish that the King of Morocco actually exerted any improper influence on the Moroccan court in this case. For example, the Moroccan court appointed experts, took seven years to reach a decision, awarded a lesser judgment than the expert recommended, and absolved five defendants—including DeJoria's company Skidmore—of liability."

The U.S. Court of Appeals also noted "there is no record evidence of a demonstrable anti-American sentiment in Morocco; in fact, American law firms do business in Morocco," rejecting the argument of Dejoria's defense who tried to build their case on the fact that the Moroccan judiciary system allegedly lacks credibility recognizing, therefore, that the Moroccan courts provided guarantees and competences to be considered in the judgment of this case.