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Court tosses Ecuador’s $9.5B claim against Chevron Canada

Canadian legal ruling

(Reuters) — The Supreme Court of Canada on Thursday dismissed claims attempting to force Chevron Corp.’s Canadian unit to pay a $9.5 billion judgment handed down in Ecuador against the U.S. oil major over pollution in the Andean country.

Residents of Ecuador’s Lago Agrio region have been trying to force Chevron to pay for water and soil contamination caused from 1964 to 1992 by Texaco, which Chevron acquired in 2001.

The villagers obtained a judgment against Chevron in Ecuador in 2011. But the company has no assets in the country, and the villagers have been trying to sue it in the United States, Canada, Brazil and Argentina to enforce the decision.

The Court of Appeal for Ontario ruled in 2017 that Chevron Canada was a separate entity to its parent company and its shares and assets could not be seized by those seeking to enforce the Ecuadorian judgment.

Canada’s highest court rejected a request to review that decision, which is now final.

“Any further efforts by the plaintiffs’ lawyers to continue this lawsuit in Canada would be an abuse of the country’s legal system and a waste of its judicial resources,” said R. Hewitt Pate, Chevron’s vice president and general counsel.

An international tribunal unanimously ruled last year that the pollution judgment by Ecuador’s Supreme Court against Chevron was procured through fraud, bribery and corruption.

Texaco was released from liability through a settlement with Ecuador years earlier, the tribunal found.

Patricio Salazar, one of the lawyers for the affected communities, said the Supreme Court ruling left parent company Chevron Corp. as the sole defendant and the communities would proceed immediately to trial to force the U.S. oil company to comply with the Ecuadorian judgment.

“While we wanted the Canada Supreme Court to hear the issue, its denial of our motion does not mean the issue is resolved and it can still be decided at a later date after we enforce the judgment,” said Mr. Salazar.



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