UPDATE 2-Chevron appeals $18 billion ruling in Ecuador lawsuit

Fri Jan 20, 2012 4:44pm EST

(Adds background, details of appeal)

Jan 20 (Reuters) - Chevron Corp has filed an appeal with Ecuador's National Court of Justice to review a judgment that the U.S. oil company pay $18 billion in damages for polluting the Amazon jungle.

Chevron was ordered by an Ecuadorian judge to pay the damages after a fraught legal battle that has lasted nearly two decades and looks like it will run longer.

Chevron inherited the case when it bought Texaco a decade ago. Its appeal on Friday argues the lower courts violated Ecuador's constitution by refusing to take corrective action in response to what Chevron calls "extensive fraud and corruption" committed by the plaintiffs' lawyers and representatives.

Chevron said the original judgment, delivered last February by a lower Ecuadorian court in Lago Agrio, was based on faulty evidence and retroactive application of a law, while ignoring releases of liability granted to Texaco by Ecuador in the 1990s.

"Today's appeal gives the National Court of Justice an opportunity to correct the grave injustices that have occurred in this case," Hewitt Pate, Chevron's general counsel, said in a statement.

Plaintiffs respond to the accusations by citing Chevron's own test data in documenting the pollution and arguing that Ecuador's release for Texaco did not prevent third parties from suing for damages.

In related litigation in New York, the plaintiffs also accuse Chevron of mishandling soil and water samples during the Lago Agrio trial by maintaining two different laboratories, based on testimony from a Chevron expert.

But the entire case may be reheard far from both Ecuador and the United States. An arbitration tribunal in The Hague last February ordered Ecuador, under a U.S.-Ecuador treaty, to take all measures at its disposal to suspend enforcement of the Lago Agrio judgment until further order from the arbitrators.

The tribunal is expected to rule soon on the question of whether or not it has jurisdiction in the case.

Chevron has asked that it not be required to post a bond to prevent enforcement of the judgment during the appeal in Ecuador, since such a bond would violate Ecuador's international obligations under the tribunal's order. (Reporting by Braden Reddall in San Francisco and Swetha Gopinath in Bangalore; editing by Andre Grenon)

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