May 1 A Toronto judge halted on Wednesday an
effort to enforce a $19 billion Ecuadorean judgment against U.S.
oil company Chevron Corp in Canada, finding that his
Ontario provincial court was the wrong place for the case.
The action is the latest skirmish in a two-decade conflict
between Chevron and residents of Ecuador's Lago Agrio region
over claims that Texaco, which Chevron acquired in 2001,
contaminated the area from 1964 to 1992.
Citing Chevron's promise to fight the plaintiffs until "hell
freezes over, and then fight it out on the ice," Justice David
Brown of the Ontario court foresaw a "bitter, protracted" battle
that would be costly and time consuming.
"While Ontario enjoys a bountiful supply of ice for part of
each year, Ontario is not the place for that fight," Brown wrote
in his ruling on Wednesday. "Ontario courts should be reluctant
to dedicate their resources to disputes where, in dollars and
cents terms, there is nothing to fight over."
Alan Lenczner, principal lawyer in Toronto for the
Ecuadorean plaintiffs, said they would definitely appeal,
arguing that a multinational company could not be immune from
enforcement in a country where it earns so much.
"Chevron Corp itself earns no money," he said in a
statement. "All its earnings and profits come from subsidiaries
including, importantly, Chevron Canada."
Chevron Canada's assets are worth more than $12 billion, the
plaintiffs had said, and alongside separate actions in Argentina
and Brazil, they had sought to persuade the Ontario court to
collect the damages awarded to them by the South American court.
Chevron, the second-largest U.S. oil company, has
steadfastly refused to pay, saying the February 2011 ruling by
the court in Lago Agrio was influenced by fraud and bribery. A
related fraud case goes to trial in New York in October.
The Supreme Court of Canada has ruled that the country's
courts can recognize and enforce foreign judgments in cases
where there is a "reasonable and substantial connection" between
the cause of the action and the foreign court.
Chevron called Brown's ruling a "significant setback" to the
Ecuadoreans' strategy of seeking enforcement against
subsidiaries that were not parties to the Ecuador case.
"The plaintiffs should be seeking enforcement in the United
States - where Chevron Corporation resides. In the U.S.,
however, they would be confronted by the fact that eight federal
courts have already found the Ecuador trial tainted by fraud,"
Chevron said in a statement.
Last month, a consulting firm whose work helped lead to the
$19 billion award against Chevron disavowed some environmental
claims used to obtain the judgment.