Caso Chevron

Chevron Wins Round In Argentina Over $9.5B Pollution Award

Law 360 - Juan Carlos Rodriguez 03/11/2017

An Argentine court has rejected an attempt by Ecuadorean citizens to enforce an Ecuadorean court’s $9.5 billion oil pollution judgment against Chevron Corp. in Argentina, saying the corporation’s Argentine subsidiary can’t be held liable for a judgment against the parent company.

In a decision issued Tuesday, the Argentine court said it lacks jurisdiction over Chevron Corp., because that entity doesn’t have adequate legal ties to the country. The company operates there through a subsidiary called Chevron Argentina SRL, but that’s not the entity found liable by the Ecuadorean court.

“It’s not possible for a judge to permit the execution in his jurisdiction of a sentence imposed by a foreign [court] without verifying if that court respected the minimum guarantees established by [the judge’s] country’s own laws that assure the defense of rights,” the Argentine court said.

A court in Lago Agrio, Ecuador, in 2011 found Chevron liable for contamination from crude oil production in the region to the tune of $18 billion. That amount was later reduced by the Ecuador Supreme Court to $9.5 billion. The plaintiffs represent some 30,000 Ecuadorean residents who claim they were hurt by environmental pollution between 1972 and 1990 caused by Texaco Inc., which merged with Chevron in 2001.

“We are confident that any jurisdiction that observes the rule of law and examines the facts will similarly find the Ecuadorean judgment to be illegitimate and unenforceable,” R. Hewitt Pate, Chevron’s vice president and general counsel, said in a statement.

But Steven Donziger, a lawyer working for the plaintiffs, slammed the Argentine judge’s reasoning and said it could leave the plaintiffs without recourse.

“Chevron only operates outside the United States through subsidiaries,” Donziger said. “If they succeed in arguing this point, there’s a chance that even if the judgment is found to be legitimate by enforcement courts, the Ecuadoreans still might never collect any money.”

The plaintiffs’ efforts to collect on the award have been stymied in the United States, with a New York federal judge finding the Ecuador judgment was fraudulently produced and could not be enforced. Neither the Second Circuit nor the U.S. Supreme Court disturbed that ruling.

The plaintiffs have been attempting to enforce the Ecuador award in other countries, including Argentina, Canada and Brazil.

Also on Tuesday, the plaintiffs won a battle in Canada over lawyers fees. A judge in January dismissed their case in that country, finding that Chevron Canada Ltd. is not subject to punishment for a judgment against its parent company. The Canadian judge had awarded fees to Chevron, but an appeals court on Tuesday found that would be an “unjust order” and reversed the fee judgment.

Earlier this month, a Supreme Court judge in Brazil also rejected the plaintiffs’ attempt to enforce the Ecuadorean judgment in that country. In accordance with Brazil’s judicial procedures, other Supreme Courts will vote at some point in the future on whether they agree with that judge’s ruling, according to a Chevron spokesman and an attorney for the plaintiffs.

Counsel information in the Argentina case was not available Thursday.

That case is Maria Aguinda Salazar et al. v. Chevron Corp., number 97260/2012, in Civil Court 61.

In Canada, Chevron Corp. is represented by Clarke Hunter and Robert Frank of Norton Rose Fulbright and Larry Lowenstein, Laura Fric and Eric Morgan of Osler Hoskin & Harcourt LLP.

Chevron Canada Ltd. is represented by Benjamin Zarnett, Suzy Kauffman and Peter Kolla of Goodmans LLP.

That case is Daniel Carlos Lusitande Yaiguaje et al. v. Chevron Corp. et al., number 2017 ONCA 827, in the Court of Appeal for Ontario.

Case and counsel information for the Brazil case was not available Thursday.

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