Chevron lands tribunal victory in Ecuador pollution battle

18 September 2013 22:57  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--An international arbitration tribunal has ruled that Chevron and its subsidiary Texaco Petroleum (TexPet) should not be held responsible for collective environmental damage claims that relate to an ongoing billion-dollar pollution case in Ecuador, the US oil giant said on Wednesday.

Chevron is fighting what it calls a “fraudulent” $19bn (€14bn) judgement by an Ecuadorian court in February 2011 that found Texaco, which was acquired by Chevron in 2001, guilty of dumping billions of toxic waste into the Lago Agrio region of the Ecuadorian Amazon between 1964 and 1990.

Chevron has rejected the verdict and refused to pay, claiming that it had cleaned up all waste pits before handing operations to state-owned oil firm, Petroecuador. Chevron filed the arbitration claim against the government of Ecuador in 2009, accusing it of violating bilateral treaties and international law by interfering in the ongoing lawsuit.

In the latest ruling, the tribunal at The Hague found that Settlement and Release Agreements signed by the Ecuadorian government and TexPet in 1995 and 1998 freed the company “of any liability for all public interest or collective environmental claims,” Chevron said in a statement.

The company said that lawyers acting for the plaintiffs have admitted themselves that their claims in the Lago Agrio case are exclusively collective and not individual.

“The game is up. This award by an eminent international tribunal confirms that the fraudulent claims against Chevron should not have been brought in the first place,” said Chevron’s vice president and general counsel, Hewitt Pate.

“It is now beyond question that efforts by American plaintiff lawyers and the government of Ecuador to enforce this fraudulent judgement violate Ecuadorian, US and international law,” he added.

This latest development follows the tribunal’s verdict in February this year that Ecuador breached the body’s prior rulings by not preventing the attempted enforcement of the $19bn judgement against Chevron’s foreign-owned assets.

The tribunal said at the time that by failing to block the judgement, Ecuador had failed to meet its international legal and treaty obligations, and that the country could be responsible for any losses caused by the enforcement of the court’s ruling.

According to Chevron, the next arbitration case at The Hague is set for January 2014, and will examine the alleged collusion between the Ecuadorian courts and the Lago Agrio plaintiffs and their lawyers.

In a separate lawsuit that will go to trial in New York on 15 October, Chevron is seeking, under the Racketeer Influenced and Corrupt Organizations Act (RICO), to overturn the 2011 verdict on the basis that the ruling was illegitimate.

Chevron will argue that judges in the case were paid thousands of dollars by the plaintiffs’ lawyers to orchestrate a fraudulent judgement against the company.

In a further twist to the protracted battle, and in an attempt to end the RICO trial, the Ecuadorian plaintiffs and their lead US lawyer, Steven Donziger, filed documents with the Manhattan court on Friday accusing Chevron of bribery.

The US company dismissed the allegations as a “PR stunt in an effort to smear Chevron”.

($1 = €0.75)

By: Simon West

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