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  HOME | Ecuador (Click here for more)

Ecuador Asks Arbitration Court to Dismiss Chevron Case

QUITO – Ecuador has asked an arbitration court in the Netherlands to dismiss a case brought against it by U.S. oil supermajor Chevron Corp., which is fighting attempts by plaintiffs in the South American nation to collect on a multi-billion-dollar pollution judgment.

Chevron, meanwhile, says it will continue to pursue its lawsuit and called on Ecuador to comply with prior rulings in the case by The Hague-based Permanent Court of Arbitration.

The company sued Ecuador before that tribunal in September 2009 for alleged “exploitation of the ongoing lawsuit against Chevron in Ecuador, as well as the government’s failure to uphold its duties under decade-old contracts.”

Since the filing of the arbitration claim, three verdicts for environmental pollution in an large swath of Amazon jungle have been handed down against Chevron in Ecuador.

In 2011, a court in the northeastern province of Sucumbios ruled in favor of 47 named plaintiffs representing 30,000 Amazon rainforest villagers and Indians who accused Texaco – acquired by Chevron in 2001 – of spoiling their lands and damaging their health by dumping billions of gallons of toxic drilling waste in a 480,000-hectare (1,850-sq.-mile) jungle area.

That decision was upheld on appeal in 2012 and again this week by Ecuador’s National Court of Justice, although the high court lowered the damages award from $19 billion to $9.5 billion.

Attorneys for the plaintiffs have sought to enforce the damages award in countries such as Argentina, Canada and Brazil because Chevron has few assets in Ecuador.

One of those lawyers, Pablo Fajardo, said this week that in the coming weeks and months legal action would be taken in other unspecified countries, adding that those proceedings would be “more forceful” than before.

In requesting Thursday that the case in The Hague be dismissed, Ecuador’s attorney general, Diego Garcia, said the lawsuit had been “prematurely and wrongly” brought by Chevron.

His office said this week’s high court ruling had made the international arbitration case “irrelevant” and also asked that Netherlands-based tribunal to cancel a hearing scheduled for January.

After the National Court of Justice’s decision, Chevron issued a statement Wednesday in which it recalled that the tribunal in The Hague recently “released the company of any liability for all public interest or collective environmental claims” and that that award “should have led to a complete dismissal of the case” in Ecuador.

Chevron says on its Web site that Ecuadorian state oil company Petroecuador should be the target of local communities’ legal action.

It notes that Texaco ceased operating in Ecuador in 1992 and that Petroecuador has been “the sole and exclusive owner and operator of greatly expanded operations in the area from (that year) to the present.”

The San Ramon, California-based company also has brought legal action in a U.S. federal court in New York against the plaintiffs’ lawyers and consultants for violations of the federal racketeering statute, accusing them of engaging in fraud and trying to extort a financial settlement from the company.

The pollution case was initially filed against Texaco in New York in 1993, but after inheriting the lawsuit Chevron succeeded in having it moved from the United States to Ecuador in 2003, four years before President Rafael Correa came to power amid voter anger at corruption and traditional politicians.

Chevron, however, later said the case had become politicized under the leftist Correa and that it could not receive a fair trial.

Although the oil company maintains that Texaco was cleared of any liability for damages after performing remediation work in the mid-1990s, plaintiffs say that 1998 agreement with the Ecuadorian government of the time did not release it from third-party claims and that Chevron is reneging on its pledge to abide by whatever decision was handed down by the Ecuadorian courts.

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