Chevron Loses Bid for Order Ecuador Award Unenforceable

(Corrects status of 2011 ruling on injunction in sixth paragraph of story published July 31.)

Chevron Corp. (CVX) failed to persuade a federal judge in New York to find an $18.2 billion judgment by an Ecuadorean court unenforceable.

U.S. District Judge Lewis Kaplan in Manhattan declined to rule today on Chevron’s request, saying it remained to be seen whether the judgment was based on fraudulent evidence. The oil company is suing lawyers for Ecuadorean plaintiffs who claim Chevron is responsible for pollution in the Amazon rainforest, alleging they fabricated evidence in the case in violation of racketeering laws.

Kaplan said the questions still to be resolved include whether the judgment is enforceable under New York law.

The issues “retain undiminished vitality,” he said in the 97-page decision.

As part of his ruling, Kaplan found an expert report recommending billions in damages against Chevron was potentially fraudulent.

In March 2011, Chevron won an extension of a temporary order barring enforcement of the judgment while the racketeering case is litigated. That order was reversed by the U.S. Court of Appeals in Manhattan in January.

“This ruling clears the way for Chevron to challenge the enforceability of the judgment in the Southern District of New York,” Justin Higgs, a spokesman for San Ramon, California- based Chevron, said in an e-mailed statement today.

Chevron ‘Setback’

Karen Hinton, U.S. spokeswoman for the Ecuadorean plaintiffs, called Kaplan’s decision a “setback” for Chevron.

“Judge Kaplan’s refusal to rule that the Ecuador judgment is unenforceable due to Chevron’s fabricated fraud charges is consistent with the unanimous rulings of appellate courts in the U.S. and Ecuador that Kaplan has no legal authority to block enforcement of the Ecuador judgment,” Hinton said in an e- mailed statement.

The racketeering case is Chevron v. Donziger, 11-00691, U.S. District Court, District of New York (Manhattan). The case in Ecuador is Aquinda v. Chevron, 002-2003, Superior Court of Nueva Loja, Lago Agrio, Ecuador.

To contact the reporter on this story: Christie Smythe in New York at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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