Canadian judge dismisses Ecuadorian lawsuit against Chevron

02 May 2013 23:40  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--An Ontario judge has dismissed a lawsuit filed by a group of Ecuadorian plaintiffs to have a Canadian court enforce a controversial $19bn (€14bn) judgement against Chevron, the US oil giant said on Thursday.

According to documents released by Chevron, Justice David Brown of the Ontario Superior Court ruled that Canadian courts had no jurisdiction to enforce the award.

Brown said that the plaintiffs’ claims, which hinged on their belief that the assets of Chevron Canada were the assets of its parent company, had no basis in law or fact.

“The plaintiffs have no hope of success in their assertion that the corporate veil of Chevron Canada should be pierced and ignored so that its assets become exigible to satisfy a judgment against its ultimate parent,” Brown said.

The Ecuadorian plaintiffs filed their lawsuit in May 2012 in efforts to retrieve the $19bn award that Chevron has so far refused to pay. The plaintiffs have filed similar suits in Brazil and Argentina.

Brown said that his courtroom was not the place to fight the ongoing battle.

“In my view, the parties should take their fight elsewhere to some jurisdiction where any ultimate recognition of the Ecuadoran judgement will have a practical effect,” Brown said.

Chevron welcomed the court’s decision and criticised the Ecuadorian plaintiffs’ strategy of seeking to enforce the judgement against assets of Chevron subsidiaries that were not party to the Ecuadorian case.

“The plaintiffs should be seeking enforcement in the US – where Chevron resides,” the company said in a statement. “In the US, however, they would be confronted by the fact that eight federal courts have already found the Ecuador trial tainted by fraud.”

Meanwhile, Alan Lenczner, a Canadian-based lawyer for the Ecuadorian plaintiffs, said he would appeal the Canadian court’s ruling.

“It cannot be right that a multinational company that operates entirely through subsidiaries is immune from the enforcement of a judgement in Canada,” Lenczner said in a statement.

“Chevron itself earns no money. All its earnings and profits come from subsidiaries including, importantly, Chevron Canada,” he added.

The Canadian court’s decision is the latest in a string of developments following the 2011 judgement in which Chevron was found guilty of dumping billions of gallons of toxic waste into the Ecuadorean Amazon – a verdict the company has since vehemently contested.

Chevron will have the opportunity to state its case in a countersuit that goes to trial in New York in October.

($1 = €0.76)

By: Simon West

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