By Jeff Gray, The Globe and Mail
17 December 2013
The Ontario Court of Appeal has revived the hopes of a group of Ecuadorean villagers trying to seize Canadian assets from Chevron Corp. to satisfy a multi-billion-dollar judgment against the oil giant in their country over pollution in the Amazon.
In a decision released Tuesday, the latest move in the 20-year saga of what may be the biggest environmental lawsuit in the world, the appeal overturned a May ruling by Ontario Superior Court Justice David Brown. Justice Brown found that Ontario courts had jurisdiction over the case against Chevron but still granted a stay in the action, concluding that Chevron Canada Ltd.'s assets were not directly owned by San-Ramon, Calif.-based Chevron Corp.
But a three-judge panel at Ontario's highest court, in a unanimous decision released Tuesday, sided with the Ecuadoreans. The ruling, which could still be appealed to the Supreme Court of Canada, does not decide on whether Chevron will have to pay up with its Canadian assets – only that the Ecuadoreans deserve their day in an Ontario court to have their case heard.
Referring to comments from a Chevron spokesman that the company would "fight this until hell freezes over" and then "fight it out on the ice," Justice James MacPherson of the Court of Appeal writes: "Chevron's wish is granted. After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in the appropriate jurisdiction. At this juncture, Ontario is that jurisdiction."
Lawyers for Amazonian villagers have been trying to use Canadian courts, and courts in a handful of other countries, to collect on a controversial $19-billion (U.S.) judgment levelled in 2011 against the company in Ecuador over oil pollution. An Ecuadorean court recently knocked the amount down to $9.5-billion on appeal.
Justice Brown did side with lawyers for the Ecuadoreans in finding that his court did have jurisdiction over the matter. However, he concluded that it had the discretion to put the case aside until evidence was brought forward that Chevron Corp. actually has any assets in Ontario, noting that any battle between the two sides would use a vast amount of court resources.
The battle between the Ecuadoreans and Chevron has seen its share of plot twists, including allegations of bribed judges, faked evidence and other wrongdoing made by both sides in U.S. courts and in a long-standing and bitter public-relations battle. Chevron has refused to pay the Ecuadorean judgment, alleging that it is the result of fraud.
Both sides have also been battling in a New York courtroom in recent months, where Chevron has accused U.S. lawyers and supporters of the Ecuadoreans of engaging in racketeering, allegations they deny. In October, one of the former Ecuadorean judges on the case testified that he and another judge accepted bribes from the plaintiffs. The plaintiffs have challenged the judge's account by saying it was tainted by payments from Chevron.
As part of a plan to try to get the massive 2011 judgment recognized in countries around the world, the plaintiffs hired prominent Toronto litigator Alan Lenczner to launch proceedings against Chevron in Ontario and force the company to pay up with its Canadian subsidiary's assets.
Mr. Lenczner said he was pleased with the ruling, which would allow his case to go forward.
"It's been 20 years," he said. "It's time to bring this to a conclusion."
But a conclusion of any kind could still be years away. Whatever the result of the court battle in the U.S., Chevron could end up bringing its claims about fraud and bribery north to Canada to battle against being forced to pay the judgment.
Chevron said in a statement that the appeal ruling only allows the case to go forward, and does not address whether the Ecuadorean judgment was "procured by fraud" or whether it should be enforced against Chevron Corp. or its Canadian subsidiary. The company says it is "evaluating next steps" and a possible appeal to the Supreme Court of Canada.
Chevron vowed to keep fighting: "If the Ecuadorian plaintiffs truly believed in the validity of the Ecuadorian judgment, they should seek enforcement in the United States, where Chevron Corp. resides, rather than targeting assets of the company's subsidiaries that are not parties to the Ecuadorian litigation. They are aware that in the U.S., however, they would be confronted by the fact that eight federal courts have already found the Ecuador trial to be tainted by fraud."