Chevron appeals $18 billion ruling in Ecuador lawsuit

SAN FRANCISCO/QUITO Fri Jan 20, 2012 6:04pm EST

SAN FRANCISCO/QUITO (Reuters) - Chevron Corp (CVX.N) 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.

The California oil company 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 have responded 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 the company of mishandling soil and water samples during the Lago Agrio trial by maintaining two different laboratories, based on testimony from a Chevron expert.

Along with the appeal in Ecuador, Chevron asked that it not be required to post a bond to prevent enforcement of the judgment during the appeal process, arguing that such a payment would violate Ecuador's obligations under an order issued last February by an international arbitration tribunal.

Pablo Fajardo, a lawyer for the plaintiffs, said the next step would be to see whether the Lago Agrio appeals court requires Chevron to pay.

"If it asks (Chevron) to pay a bond, and if it pays the bond, then only the bond can stop us from carrying out the sentence," Fajardo told Reuters.

Asked if the plaintiffs were looking at any country in particular where it could seek to collect the damages, he said they would first await the decision on the bond. "We haven't done anything, we don't have any plans yet," Fajardo said.

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

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

(Reporting by Braden Reddall in San Francisco, Swetha Gopinath in Bangalore and Eduardo Garcia in Quito; Editing by Andre Grenon, Gary Hill)

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Comments (1)
AlkalineState wrote:
Chevron is the party that pushed for the trial to be moved to Ecuador in the first place (originally it was being heard in U.S. federal court since Chevron is a U.S. company). Now that they lost the case, they are challenging the legitimacy of the court in Ecuador? Can you get any sleazier, Chevron? Your company messed the place up. Now clean it up. That’s part of doing business.

Jan 20, 2012 5:26pm EST  --  Report as abuse
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