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BUENOS AIRES/QUITO (Reuters) - An Argentine judge has embargoed up to $19 billion in Chevron assets in connection with an environmental lawsuit by Ecuadorean villagers, a lawyer for the plaintiffs said on Wednesday, the latest volley in a two-decade-long legal saga that now spans several countries.
An Ecuadorean court last year ordered Chevron Corp (CVX.N) to pay the enormous sum for contamination of watersheds over nearly 30 years that the plaintiffs say sickened indigenous tribespeople and farmers in the Ecuadorean Amazon.
Chevron has refused to make any payments and accuses Ecuadorean courts of fraud. Because the company has few assets in the Andean nation, the plaintiffs are seeking enforcement of the ruling in other countries including Brazil and Canada.
"The freeze order applies to the entire $19 billon amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well," the plaintiffs said in a statement.
The ruling could pave the way for the plaintiffs to collect on the award. But it could also be just another round of judicial ping-pong in a complex legal battle that has included frequent appeals and vicious accusations.
The plaintiffs' lawyer, Enrique Bruchou, said the ruling by Argentine judge Adrian Elcuj includes an embargo on 40 percent of Chevron's Argentine oil revenue, the company's shares in its Argentine subsidiary and a stake in an oil pipeline.
"We consider this to be an exemplary ruling," he said. "We are letting the world know that foreign investment is welcome in Latin America, but that investors must adhere to the same environmental standards that apply in their own countries."
Chevron, Argentina's fourth-largest oil producer, said it was not aware of any Argentine court order and reiterated its position that the Ecuador ruling is unenforceable.
"The Ecuador judgment is a product of bribery, fraud, and it is illegitimate ... We do not believe that the Ecuador judgment is enforceable in any court that observes the rule of law," the company said in a statement.
Bruchou said the company can appeal, but would have to file for an appeal in Ecuador because the judge issued the embargo after a request by an Ecuadorean court.
The plaintiffs plan to file similar suits in Colombia as well as in as yet unidentified countries in Asia and Europe.
A U.S. appeals court in January said that a U.S. judge did not have the authority to stop courts in other countries from enforcing the judgment. Chevron appealed the decision, but the U.S. supreme court rejected the appeal in October.
Filled with intrigue, accusations of corruption, bribery and dirty tricks, the complicated case has been fought for nearly two decades, mainly in courts in Ecuador and the United States.
Chevron filed for arbitration in 2009, accusing Ecuador of violating a treaty with the United States requiring the OPEC-member country to guarantee Chevron a fair trial.
The company has also accused the plaintiffs, their legal team and their advisers of fraud in a U.S. court. The trial is scheduled to begin on October 15, 2013.
The plaintiffs from villages in the oil-rich Amazon won an $18.2 billion case against the oil giant over claims that Texaco, bought by Chevron in 2001, contaminated the area from 1964 to 1992.
Their legal team argues that Texaco's remediation efforts were insufficient. Their long-term legal adviser, Steven Donziger, has also filed counter claims in a U.S. court accusing Chevron of fraud.
The claimants' lawyers estimate that Chevron's assets in Argentina are worth around $2 billion and that they could obtain some $600 million a year if the embargo is enforced.
In September, Chevron signed an accord with state-controlled YPF (YPF.N), Argentina's No. 1 energy company, to consider a joint exploration project.
Chevron argues that the company has no direct assets in Argentina because its operations in the country are conducted by subsidiaries.
"Plaintiffs' lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina's pursuit of its important energy resources," Chevron said.
Additional reporting By Alejandro Lifschitz and Eduardo Garcia; Writing by Hugh Bronstein; Editing by Jeffrey Benkoe and Jim Marshall