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Canadian Court Says Ecuadoreans Can Pursue Chevron Assets

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Dec. 17 (Bloomberg) -- A lawsuit by a group of Ecuadoreans to seize Chevron Corp.’s Canadian assets can proceed in the country, a Canadian court ruled today.

The Court of Appeal for Ontario ruled today that the 47 villagers have the right to pursue Chevron’s Canada assets. It reverses a ruling made on May 1 that stated the company did not have any assets in Canada.

A court in the Latin American country in 2011 found the company liable for about three decades of soil and water pollution near oil wells that ruined the health and livelihoods of Amazon rain forest 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 award was reduced to $9.5 billion from $19 billion on Nov. 12 by the Ecuadorean National Court of Justice, the nation’s highest tribunal.

“Even before the Ecuadorean judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost,” judges James MacPherson, Eileen Gillese and C. William Hourigan said in the ruling.

The judges noted in the ruling that a Chevron spokesman had said: “We’re going to fight this until hell freezes over. And then we’ll fight it out on the ice.”

Chevron’s wish is granted, the judges said.

“After all these years, the Ecuadorean plaintiffs deserve to have recognition and enforcement of the Ecuadorean judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction,” the ruling states.

Possible Appeal

“The decision affords the plaintiffs no substantive relief and merely allows the action to go forward,” Morgan Crinklaw, a spokesman for the company, said in an e-mailed statement. “Chevron Corp. is evaluating next steps, including a possible appeal of today’s decision to the Supreme Court of Canada.”

The Ecuadoreans should have an opportunity to attempt to enforce the judgment in a court where Chevron will have to respond to the merits, the judges said.

Chevron’s presence in Canada dates back to the 1930s and includes an oil-refining complex in British Columbia, an Alberta oil-sands venture and offshore wells in the Atlantic Ocean. The Ecuadoreans estimate that Chevron has $15 billion in Canadian assets, according to a statement today.

“This decision affirms that the court in Canada has jurisdiction and it forces Chevron to participate in a trial process to enforce the Ecuadorean judgment,” Steven Donziger, a legal adviser to the Ecuadorean communities, said by phone today. “The entirety of that judgment could be paid, every penny, if an enforcement action in Canada is successful.”

Chevron and Chevron Canada were each ordered to pay plaintiffs costs of C$50,000 ($47,000), the ruling said.

The case is Yaiguaje v. Chevron Corp., C57019, Court of Appeal for Ontario (Toronto)

To contact the reporters on this story: Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net; Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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