(Adds comments from analyst and lawyer)
By David Ljunggren
OTTAWA, Sept 4 Canada's top court ruled on
Friday that a group of Ecuadorean villagers could pursue a
multi-billion pollution lawsuit against Chevron Corp in
the Canadian province of Ontario.
Chevron is contesting a ruling by Ecuador's highest court
that said the oil giant had to pay $9.5 billion to clean up
contamination at a site it once owned. The villagers are now
going after Chevron's assets in Canada, Brazil and Argentina.
"Canadian courts, like many others, have adopted a generous
and liberal approach to the recognition and enforcement of
foreign judgments," the Canadian Supreme Court said in its
The decision marked the third defeat for Chevron on the
merits of the case in Canadian courts. The villagers can now
continue with a 2012 lawsuit against Chevron's Canadian
subsidiary in a lower Ontario court
In a ruling that affirms existing law, the court rejected
Chevron's argument that there was no legal basis for the
villagers to sue Chevron Canada, which was not part of the
Chevron said in an emailed statement it would argue in the
lower Ontario court that the lawsuit should be stopped early on
the grounds the initial judgment "is the product of fraud and
other misconduct, and is therefore illegitimate and
A U.S. judge concluded last year that the American lawyer
who helped secure the settlement used corrupt means. That ruling
has been appealed.
Fadel Gheit, an oil industry analyst at Oppenheimer & Co,
said he gave the villagers "very little chance of succeeding in
Canada," given the controversy over the original judgment and
Chevron's relatively limited asset base in Canada.
The villagers have been litigating the case for over 20
years. They initially sued Texaco, which Chevron later acquired,
over contamination in the jungle around Lago Agrio, Ecuador,
between 1964 and 1992.
"It is clearer than ever that Chevron's long run from
justice is coming to an end," Aaron Marr Page, a U.S. lawyer for
the villagers, said in a statement.
Canada's Supreme Court said in its ruling that it was taking
no position on the merits of the original case against Chevron.
Dianne Saxe, a Toronto environmental lawyer who has studied
the case, said the Ontario court would have to decide whether
the original judgment was valid and if Chevron Canada's assets
could be seized to pay off the debt.
"Those are the two big things that are left open and those
were always the main ones," she said.
The case is Daniel Carlos Lusitande Yaiguaje and others vs
Chevron Corporation and Chevron Canada Ltd, file no 35682.
(Additional reporting by Ernest Scheyder in Williston, N.D.;
Editing by W Simon, Jeffrey Hodgson and Paul Simao)