Tribunal finds Ecuador released Chevron from pollution liability

Wed Sep 18, 2013 5:37pm EDT

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013. REUTERS/Mike Blake

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013.

Credit: Reuters/Mike Blake

(Reuters) - In a dispute stemming from a lengthy legal battle over Amazon rain forest pollution, arbitrators ruled that Chevron had already settled claims for damages in agreements with Ecuador despite a $19 billion award against the oil company.

The international tribunal, acting under The Hague's Permanent Court of Arbitration, said in a ruling on Tuesday that Ecuador opted not to pursue damages beyond the country's 1995 and 1998 release agreements with Texaco - a company bought by Chevron in 2001.

Those releases "also preclude any third person making a claim," according to the decision, which was made available on a Chevron website.

It is only the latest ruling in Chevron's favor by the three-person tribunal, which operates under the United Nations Commission on International Trade Law.

The panel ruled in February that Ecuador's government should have stopped plaintiffs in the case from going to courts in Brazil, Argentina and Canada to try to collect the $19 billion, awarded by an Ecuadorean court in 2011.

That judgment came 18 years after Texaco was first accused in a New York court of polluting the rain forest and sickening people there, for whom the lawsuit was filed. The case was later moved to Ecuador after Texaco sought such a transfer.

But Chevron argues that evidence it uncovered through U.S. courts proves fraud by lawyers for the Ecuadorean plaintiffs, allegations the lawyers deny. The tribunal will consider those claims in a process due to begin in January.

The second-largest U.S. oil company is pursuing racketeering and fraud charges against the lawyers for the Ecuadorean plaintiffs, in a case due to go to trial in New York next month.

The company launched the international tribunal action in 2009, charging that Ecuador had breached a trade agreement with the United States by not ensuring a fair trial.

But Ecuador's attorney general contends the tribunal has no jurisdiction because Quito's bilateral trade agreement with Washington took effect five years after Texaco ended operations in Ecuador in 1992.

And Ecuador's president, Rafael Correa, even sought to annul his country's investment protection treaty with the United States because of damages found against Ecuador - including $1.8 billion it was ordered to pay to Occidental Petroleum Corp for seizure of its assets.

The Ecuador attorney general's office did not respond to a request for comment on Wednesday. But just this week, Correa criticized Chevron on a visit in the Amazon town of Shushufindi, after visiting a field once operated by Texaco.

"Not only did they cause this pollution to save a few dollars, but also they did not remediate it. They misled Ecuador and the world, they misled the residents and the Ecuadorean state," Correa told reporters on Tuesday.

The U.S. fraud and racketeering case is Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691.

(Reporting by Braden Reddall in San Francisco and Alexandra Valencia in Quito; Editing by Kenneth Barry)

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