The Courage Co. v. the Chemshare Corp.

93 S.W.3d 323, 2002 WL 1961228
CourtCourt of Appeals of Texas
DecidedNovember 27, 2002
Docket14-00-00798-CV
StatusPublished
Cited by67 cases

This text of 93 S.W.3d 323 (The Courage Co. v. the Chemshare Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Courage Co. v. the Chemshare Corp., 93 S.W.3d 323, 2002 WL 1961228 (Tex. Ct. App. 2002).

Opinions

MAJORITY OPINION

JOHN S. ANDERSON, Justice.

This is an appeal from a Harris County district court’s judgment denying recognition of a foreign money judgment that appellant, The Courage Company, L.L.C. (“Courage”) obtained against appellee, The ChemShare Corporation (“ChemShare”) in the District Court of Tokyo, Japan. Courage challenges the district court’s determination that the Japanese judgment was not entitled to recognition or enforcement in Texas for the following reasons: (1) the Japanese system did not provide procedures compatible with due process because it did not provide for jury trials; (2) the Tokyo District Court did not have personal jurisdiction over ChemShare; (3) Courage’s cause of action was repugnant to the public policy of Texas; (4) the parties agreed to submit to arbitration; (5) Japan was a seriously inconvenient forum for ChemShare; and (6) Courage failed to comply with the procedural requirements of the Texas Uniform Foreign Country Money-Judgment Recognition Act (“UFCMJRA”) by failing to provide a properly authenticated translation of the judgment. Because the parties had agreed to submit to arbitration, we affirm on that ground and do not reach Courage’s other issues.

PROCEDURAL BACKGROUND

In August of 1998, Courage, a Virginia limited liability company, sued ChemShare and another company, Winsim, Inc., both Texas corporations, in the District Court of Tokyo, Japan. Courage sought restitution of over $1.2 million allegedly owed by ChemShare under an agreement known as the DesignMASTER Development Agreement (Development Agreement). Courage brought the suit shortly after obtaining its interest in the Development Agreement by assignment from Information Services International-Dentsu, Limited (“ISI-Dent-su”), a Japanese company that originally entered into the agreement with ChemS-hare. ChemShare filed a reply in the Tokyo District Court, asserting a jurisdictional defense, contesting Courage’s standing to bring the suit, and raising forum non conveniens objections. The record discloses no other appearance by ChemShare prior to the pronouncement of the Tokyo District Court’s judgment on December 3, 1999.

[327]*327In its judgment, the Tokyo District Court rejected ChemShare’s jurisdictional challenge and ordered ChemShare to pay Courage $1,080,977.49, together with interest on a down payment of $730,054.02, and a portion of the court costs. The court dismissed Courage’s claims against Win-sim, Inc. for lack of jurisdiction.

Courage subsequently filed a Notice of Filing of Foreign Judgment and supporting affidavit in the Harris County District Court to obtain recognition of the judgment. In response, ChemShare filed a Motion for Nonrecognition of Foreign Country Money Judgment, alleging two mandatory and three discretionary grounds for nonrecognition under the UFCMJRA, and further alleging that Courage failed to satisfy the procedural requirements of the UFCMJRA. In an order dated June 5, 2000, the trial court granted ChemShare’s motion, holding that the judgment rendered by the Tokyo District Court on December 3, 1999 was refused recognition and was not enforceable in Texas.

Courage moved for new trial or for reconsideration of the trial court’s order refusing recognition, which the trial court denied. At Courage’s request, the trial court made findings of fact and conclusions of law. Because the court adopted the proposed findings of fact and conclusions of law submitted by ChemShare, Courage objected to a number of them. The trial court overruled the objections, but amended the findings of fact and conclusions of law previously entered to correct several typographical errors and to correct the identification of a conclusion of law as a finding of fact. This appeal followed.

FACTUAL BACKGROUND

The facts relevant to the disposition of this appeal are as follows. ChemShare' was a Texas corporation that designed and developed simulation software programs used in chemical plants and refineries. ISI-Dentsu was a Japanese company engaged in the computer-aided design business. In 1986, ChemShare and ISI-Dent-su entered into a distributor agreement, in which the parties agreed that ISI-Dentsu would distribute ChemShare’s simulation software products to ISI-Dentsu’s customers in Japan, and ChemShare would receive royalty payments on ISI-Dentsu’s sales of ChemShare’s products.

Following the expiration of the initial distributor agreement in 1991,1 ChemS-hare and ISI-Dentsu continued to conduct business as they had done in the past while they negotiated a new distributor agreement. ChemShare had created a software program known as DesignMASTER that provided an integration system for process engineering tasks, and ISI-Dentsu proposed that ChemShare modify and enhance the DesignMASTER program based on specifications provided by ISI-Dentsu. In November 1991, ChemShare and ISI-Dentsu entered into the DesignMASTER Development Agreement (the “Development Agreement”), in which ISI-Dentsu agreed to cover a portion of the costs associated with the development and enhancement of the DesignMASTER products by prepaying royalties that would be due ChemShare under the new distribution agreement for the anticipated future sales of ChemShare’s products. The Development Agreement provided as follows:

All enhancements and developments made hereunder by ChemShare shall be deemed to be the enhancement of De-signMASTER under the Distributor Agreement, thus [ISI-Dentsu] shall be [328]*328granted by ChemShare the same distribution right in Japan of the enhancements and developments of Design-MASTER as currently exist under the proposed Distributor Agreement.

The Development Agreement also provided that ChemShare was to complete the development of DesignMASTER in accordance with a development schedule that contemplated completion in June of 1992. ISI-Dentsu agreed to pay ChemShare in accordance with an attached disbursement schedule that contemplated payments from November 1991 through October 1992. The Development Agreement recited that the payments were “a prepayment of the portion of royalties to be remitted by [ISI-Dentsu] to ChemShare under the Distributor Agreement.”

The Development Agreement contained a choice of law provision specifying that the Development Agreement “shall be governed by and construed in accordance with the laws of Japan.” It also contained a forum selection clause providing as follows:

ChemShare hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the Tokyo District Court, in relation to any claim, dispute or difference which may arise under this Agreement, but without prejudice to the rights of [ISI-Dentsu] to commence any legal action or proceeding in the courts of any other competent jurisdiction.

Following the execution of the Development Agreement, ChemShare and ISI-Dentsu completed negotiations of the terms of a new distributor agreement. The new agreement, entitled “Distribution Agreement,” was dated June 11, 1992, and had a retroactive effective date of April 1, 1991.

In contrast to the Development Agreement, the Distribution Agreement provided for arbitration of “any dispute or difference arising out of or relating to this Agreement.”2 Arbitration was to be held according to the Rules of Conciliation and Arbitration of the International Chamber of Commerce. In the event that ChemS-hare initiated a dispute, the arbitration was to be held in Tokyo, Japan.

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Bluebook (online)
93 S.W.3d 323, 2002 WL 1961228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-courage-co-v-the-chemshare-corp-texapp-2002.