Canada's Top Court Rules in Favor of Ecuador Villagers in Chevron Case
September 04 2015 - 01:20PM
Dow Jones News
In a boost to Ecuadorean villagers' long-running bid to enforce
a $9.5 billion judgment against Chevron Corp., the highest court in
Canada ruled Friday that villagers can move forward with an effort
to seize assets tied to the oil company.
The ruling doesn't mean that villagers can begin seizing
Chevron's assets in Canada. Rather, the case will now get kicked
back to a trial court in Ontario, where the two sides will battle
over whether the judgment should be recognized and enforced.
"A finding of jurisdiction does nothing more than afford the
plaintiffs the opportunity to seek recognition and enforcement of
the Ecuadorian judgment," wrote Justice Clé ment Gascon.
The ruling follows three years of fighting over whether Canada
can serve as a venue for the broader battle. In a unanimous 7-0
ruling, the Canadian high court on Friday sided with the lawyers
for the villagers, saying the province of Ontario has jurisdiction
to recognize the $9.5 billion judgment, which was obtained by the
villagers in an Ecuadorean court in 2011.
Chevron had argued that its assets in Canada belong not to the
parent company that was involved in the original Ecuador judgment,
but to a subsidiary called Chevron Canada Ltd.
The plaintiffs argued Chevron owns an estimated $15 billion in
assets in Canada, including offshore oil fields, a tar sands
investment and a refinery. Chevron has declined to disclose the
value of its assets there.
Canada's high court rejected the arguments made by Chevron.
According to Justice Gascon, Chevron Canada's "bricks-and-mortar
business in Ontario and its significant relationship with Chevron"
is enough to establish jurisdiction for the case.
The ruling in Canada is part of a broader legal battle between
Ecuadorean farmers and Chevron that has stretched for more than two
decades and been litigated across multiple continents. The original
lawsuit was filed in 1993 against Texaco Inc., which was accused by
Ecuadorean farmers of polluting the Amazon rain forest with its oil
drilling. Chevron inherited the lawsuit when it acquired Texaco in
2001 and denied liability for the environmental damage.
An Ecuadorean court in 2011 awarded $19 billion to the
plaintiffs, one of the largest environmental verdicts in history,
which was ultimately reduced to $9.5 billion by Ecuador's highest
court. Chevron has refused to pay the judgment and embarked on an
aggressive legal effort to undermine it.
Since Chevron doesn't hold any assets in Ecuador, Steven
Donziger, the primary lawyer spearheading the plaintiffs' efforts,
and his team have tried to enforce the judgment by going after
Chevron's assets around the world, including Canada, Brazil and
Argentina.
"We are confident that once Canadian courts review the
fundamental fairness and strength of the judgment, it will be
respected and Chevron will be forced to turn over any and all
assets necessary to pay the amount ordered by the [Ecuadorean]
court," Mr. Donziger said in a statement Friday.
Mr. Donziger's efforts come amid questions about the validity of
the original judgment from Ecuador. An appeals court is currently
reviewing a ruling by a Manhattan federal judge who found last year
that the $9.5 billion judgment was obtained fraudulently by Mr.
Donziger through bribery, witness-tampering and other corrupt
misconduct. The judge's decision barred Mr. Donziger and his team
from profiting from the award.
"Today's decision has no bearing on the legitimacy or
enforceability of the fraudulent [Ecuadorean] judgment," said
Morgan Crinklaw, a spokesman for Chevron, in a statement.
Mr. Donziger has denied any wrongdoing.
Chevron has also filed claims against Ecuador in an
international tribunal under The Hague, accusing the country of
violating its obligations under a U.S.-Ecuador investment treaty by
denying Chevron a fair trial.
Write to Nicole Hong at nicole.hong@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 04, 2015 13:05 ET (17:05 GMT)
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