Ecuador high court halves judgment against Chevron

Ecuador's National Court of Justice on Nov. 13 ordered the Chevron company to pay $9.51 billion in fines and legal fees. This was a significant reduction from the previous $18 billion judgment. The lawsuit, brought by the Amazon Defense Front, arises out of Chevron's drilling for oil in Ecuador* and the resulting pollution in the rainforest. The original judgment was handed down in 2011, but Chevron has been appealing since and has also removed its presence in Ecuador. Chevron won an arbitration to the Hague's Permanent Court of Arbitration (PCA) which stated Chevron was released from pollution liability a full four years before the lawsuit was filed. Chevron continues to allege fraud and corruption resulted in the judgment and has an ongoing lawsuit (PDF) against Ecuadoran plaintiffs and their lawyer for racketeering. However, other groups argue that Chevron's negligent practices caused immense damage from pollution and is simply attempting to avoid any judgment.

There are several ongoing lawsuits resulting from this matter. Last June Ecuador filed a lawsuit against Chevron in Canada. That February the Provincial Court of Justice of Sucumbios rejected an arbitration decision by The PCA which had the effect of temporarily enjoining the $18.2 billion judgment that was upheld in January after an appeal until a final judgment was made by the PCA. A month earlier, the US Court of Appeals for the Second Circuit in New York reversed the injunction against enforcement of the multi-billion judgment granted to Chevron by the US District Court for the Southern District of New York reasoning that judgment-debtors like Chevron can challenge a foreign judgment's validity under the Uniform Foreign Money-Judgments Recognition Act (PDF) only defensively and in response to an attempted enforcement which was not initiated by the plaintiffs.

From Jurist, Nov. 13. Used with permission.

* The drilling was actually carried out by Texaco, which Chevron acquired in 2001.