A Canadian court ruled last week that a $9.5 billion enforcement action related to a judgement issued in Ecuador nearly six years ago cannot be enforced against Chevron Canada.
The Ontario Superior Court of Justice ruled last week that the multi-billion dollar judgement cannot be enforced against Chevron Canada after finding that the firm is a separate entity from Chevron Corporation and is not a party to the Ecuadorian lawsuit or a debtor to the judgment.
Chevron Canada is an indirect subsidiary of Chevron.
In its decision, the court found that Chevron Canada and Chevron are separate legal entities “with separate rights and obligations.”
The court ruled that the plaintiffs’ claim cannot succeed against Chevron Canada and dismissed the claim against the firm.
The decision prevents the plaintiffs from pursuing Chevron Canada Limited’s assets.
In a related ruling, the court also found the plaintiffs can not prohibit Chevron from using evidence of fraud committed by the plaintiffs as part of the company’s defense against the recognition and enforcement action in Canada.
The Ecuador case stretches all the way back to 1964 when Texaco, now part of Chevron, spilled millions of gallons of wastewater while operating in Ecuador.
Texaco spent $40 million to clean up its share of the spill sites and both local communities and the Ecuadorian government released the company from any further liability.
In 2011, an Ecuadorian court ruled granted a group of villagers represented by American attorney Steve Donziger an $18 billion judgement against Chevron.
That award was later reduced to $9.5 billion.
However, soon after the court’s decision was issued, several reports of corruption and bribery efforts led by Donziger began to emerge.
The Ecuador judgment was eventually overturned by a Federal Judge Lewis Kaplan in 2014 after he found that Donziger violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
The court found that Donziger had orchestrated a scheme to coerce court officials and others involved in the Ecuador case.
Judge Kaplan also found that Donziger and his legal team bribed an Ecuadorean judge to secure the initial $18 billion judgment.
The 2014 ruling found that the Ecuador judgement was unenforceable and prohibits Donziger and his associates from seeking to enforce the Ecuadorian judgment in the United States.
The ruling also prohibits Donziger and his associates from profiting from the case.
That ruling was upheld in August of 2016 when the United States Court of Appeals for the Second Circuit unanimously affirmed Judge Kaplan’s decision.
Donziger and his team have denied wrongdoing.
“Once again, the plaintiffs’ attempts to enforce their fraudulent judgment have been rebuked. We are confident that any jurisdiction that examines the facts of this case and the misconduct committed by the plaintiffs will find the Ecuadorian judgment illegitimate and unenforceable,” Chevron Corporation vice president and general counsel R. Hewitt Pate said on Friday.