Canadian Court Opens Door to a $9.5 Billion Ecuadorean Pollution Claim Against Chevron

The oil company will continue to resist liability it claims was established by means of fraud and extortion

Photographer: Rodrigo Buendia/AFP/Getty Images

The 22-year legal campaign to hold Chevron liable for oil pollution in the Amazon in Ecuador will continue—now in Canada.

The Canadian Supreme Court ruled that Ecuadorean villagers may use Canada's courts to try to enforce a $9.5 billion judgment issued by an Ecuadorean trial court in 2011. Chevron claims that it, not the villagers, is the victim of unlawful conduct and has refused to pay up. The company has no assets that can be seized in Ecuador, so the plaintiffs are seeking to enforce the Ecuadorean judgment in Canada, where Chevron has extensive operations.

In a 37-page ruling, the Canadian Supreme Court said that country's judiciary has jurisdiction to hear the enforcement action. "Canadian courts, like many others, have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments," the high court stated. It stressed the need for "comity" among national judicial systems in an era of burgeoning cross-border commerce.

Humberto Piaguaje, executive coordinator of the Union of Persons Affected by Texaco/Chevron, a local group representing the Ecuadoreans, said by e-mail: "This decision is the beginning of the end of Chevron's abusive and obstructionist litigation strategy to avoid paying for the clean-up of the company's extensive toxic contamination of our ancestral lands." 

The Canadian Supreme Court emphasized that it was not addressing the merits of the plaintiffs' claim or Chevron's contention that the Ecuadorean judgment had been obtained by means of coercion, bribery, and fabricated evidence. In March 2014, a U.S. federal judge agreed with Chevron and branded the lead plaintiffs' lawyer, Steven Donziger of New York, a "racketeer" who organized a vast extortion conspiracy in hopes of shaking down the oil company. Donziger has denied that finding and appealed in the U.S. That case continues on a separate track from the one in Canada.

“The establishment of jurisdiction does not mean that the plaintiffs will necessarily succeed in having the Ecuadorian judgment recognized and enforced," the Canadian Supreme Court said. "A finding of jurisdiction does nothing more than afford the plaintiffs the opportunity to seek recognition and enforcement of the Ecuadorian judgment. Once past the jurisdictional stage, Chevron and Chevron Canada can use the available procedural tools to try to dispose of the plaintiffs’ allegations." The high court went on to list potential defenses Chevron might invoke, including "fraud, denial of natural justice, or public policy."

Chevron issued a statement indicating that it will continue to resist paying the judgment. "The Supreme Court of Canada has simply decided that the Ontario trial court has jurisdiction to entertain further proceedings in the action, including examination of several legal reasons why the effort to bring this fraudulent judgment to Canada should be stopped early in those proceedings," Chevron said.

And so, the lawyers will battle on.

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