wednesday, 10 october of 2012

High Court rejects Chevron challenge in Ecuador case

Ecuador case

High Court rejects Chevron challenge in Ecuador case

The Supreme Court on Tuesday refused to consider Chevron Corp.'s bid to block plaintiffs from trying to collect a $19 billion Ecuadorean environmental judgment against the company.

Chevron was seeking to bar a group of Ecuadorean plaintiffs from starting collection efforts in the U.S. or other nations. The plaintiffs called the company's legal argument unprecedented and said they should be allowed at least to try to collect the money.

The two sides are engaged in a long-running—and global—legal fight over alleged oil pollution in Ecuador's Amazon region.

After several years of litigation, an Ecuadorean court handed down the multibillion-dollar judgment in 2011, finding Texaco Inc.'s oil exploration was responsible for environmental damage in the region. Chevron acquired Texaco in 2001, years after the company ceased its oil-drilling operations in Ecuador.

Chevron has argued the judgment was procured by fraud and was the product of an Ecuadorean judicial system that was neither impartial nor fair.

In March 2011, a New York federal trial judge expressed similar concerns and issued a preliminary injunction that barred the plaintiffs from seeking to enforce the judgment anywhere outside of Ecuador. Several months later, the Second U.S. Circuit Court of Appeals threw out the injunction, saying the lower-court judge had no power to "declare a foreign judgment null and void for all purposes in all countries."

The appeals court also said the trial judge couldn't pre-empt the plaintiffs from attempting to pursue Chevron in New York.

The Supreme Court, in a short written order, left the Second Circuit ruling in place and rejected Chevron's appeal without comment.

Chevron has brought other claims against the plaintiffs and their lawyers, arguing they engaged in fraud and extortion to shake down the company. Those claims are still proceeding in federal court.

Chevron says it has no assets in Ecuador. A Chevron spokesman said, "While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs' lawyers' attempts to enforce" the Ecuadorean judgment.

In recent months, the plaintiffs have brought collection actions against Chevron in Canada and Brazil, targeting assets the oil giant holds in those countries. Karen Hinton, a spokeswoman for the plaintiffs, said the group may file additional lawsuits to collect on the judgment, including possibly in the U.S.

"Chevron's latest loss before the Supreme Court is an example of the company's increasingly futile battle to avoid paying its legal obligations in Ecuador," Aaron Marr Page, a lawyer for the Ecuadoreans, said in a written statement.

(Published by WSJ - October 9, 2012)

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