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Canadian Judge Stays Ecuadorean Claim Against Chevron Assets

A claim by a group of Ecuadorean villagers seeking to seize Chevron Corp. (CVX)’s Canadian assets was stayed by a judge in Ontario at Chevron’s request.

“Chevron does not possess any assets in this jurisdiction at this time,” Ontario Superior Court Justice David Brown said in a ruling today on the asset-seizure request filed in Toronto last year by lawyers for 47 Ecuadorean villagers.

A court in the Latin American country in 2011 found Chevron liable for 28 years of soil and water pollution near oil wells that ruined the health and livelihoods of Amazon rainforest dwellers. Since then, Ecuadorean farmers and fishermen have been trying to collect $19 billion in environmental damages from San Ramon, California-based Chevron, the world’s third-largest oil company.

“The parties should take their fight elsewhere to some jurisdiction where any ultimate recognition of the Ecuadorian Judgment will have a practical effect,” Brown said in his ruling.

The plaintiffs are seeking enforcement outside their home country because Chevron has no refineries, oil wells, storage terminals or other properties in Ecuador. Lawyers for the Amazon River basin residents asked the Ontario court for a judgment equivalent to $18.26 billion.

Chevron said it was pleased with the judge’s decision, according to a statement.

Chevron Fight

The plaintiffs plan to appeal, Alan Lenczner, principal lawyer in Toronto for the Ecuadorians, said in a statement.

“It cannot be right that a multinational company that operates entirely through subsidiaries is immune from the enforcement of a judgment in Canada, particularly where the subsidiary is 100 percent-owned and provides some of the billions of dollars that Chevron pays out in dividends each year and even more billions in share buybacks,” he said.

Chevron has refused to pay the judgment or entertain the notion of settlement talks because it maintains the ruling resulted from bribery and fraud, charges that lawyers and a spokeswoman for the plaintiffs have rejected.

Brown said the plaintiffs “have no hope of success” in their claim that Chevron’s Canadian subsidiary should be used to fulfill the judgment of the Ecuadorean court. In his decision, the Ontario judge noted Chevron’s determination to fight.

“Chevron is on record saying: ‘We will fight until hell freezes over and then fight it out on the ice.’ While Ontario enjoys a bountiful supply of ice for part of each year, Ontario is not the place for that fight,” Brown wrote in his ruling. “There is nothing in Ontario to fight over.”

Toxic Soil

The plaintiffs have filed similar asset-seizure motions against Chevron in courts in Brazil and Argentina.

The 2011 judgment by a provincial Ecuadorean court blamed decades of toxic soil and water contamination on Texaco Inc., which Chevron acquired in 2001. Texaco was found to have discharged into the environment saltwater and other byproducts of oil drilling. Texaco quit the country and its equipment was taken over by the Ecuadorean state oil company in 1992.

Brown stayed the plaintiffs’ claim in Canada, while allowing them the right to try again if they obtain new evidence that Chevron possesses assets in the court’s jurisdiction.

Exxon Mobil Corp. (XOM) is the world’s biggest oil company by market value, followed by PetroChina Company Ltd., according to data compiled by Bloomberg.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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