Ecuadorians Plan to Seize $106 Million in Chevron Assets

By Adam Klasfeld, Courthouse News Service
30 September 2014

Amazon rainforest residents plan to seize the $106 million in Chevron's assets in Ecuador, their lawyers said Tuesday, turning a corner in the decades-old pollution fight.

If successful, the seizure will mark the first time that Amazon residents received a penny of the $9.5 billion environment judgment that an Ecuadorian court issued three years ago.

Indigenous and farmer Ecuadorians have been fighting for more than 20 years to hold Chevron liable for its predecessor Texaco's drilling in Lago Agrio, named after the oil company's former headquarters in Sour Lake, Texas.

A year after Texaco left, lawyers for the Ecuadorians filed a federal class action in New York, seeking environmental and public health damages.

Chevron had the case refiled in Ecuador after acquiring Texaco in 2001.

Facing imminent defeat nearly a decade later, Chevron filed a federal racketeering lawsuit in New York that accused the lawyers for their adversaries of planning a "shakedown" to defraud the Lago Agrio court through bribery, intimidation and ghostwriting.

That case capped off this year with U.S. District Judge Lewis Kaplan finding that the Lago Agrio judgment had been "procured by corrupt means" and forbidding lawyers for the Ecuadorians from profiting from it.

The Ecuadorians have denied the allegations and appealed that decision, which they contend will not slow down collection efforts underway against Chevron in Canada, Brazil and Argentina.

Chevron never drilled in Ecuador and had no assets to speak of there - until last week.

On Friday, a Dutch court affirmed a $106 million judgment that Chevron won against the Ecuadorian government over an unrelated international arbitration dispute.

Steven Donziger, a New York-based attorney who helped lead the Amazon litigation, said Tuesday that his former clients have a valid claim on that award because the Ecuador's Supreme Court affirmed the judgment last year.

The Lago Agrio provincial court finalized it in two separate court orders shortly before that.

"Chevron cannot on the one hand refuse to pay a valid final court judgment in its chosen forum of Ecuador that has been affirmed on appeal, and on the other hand pretend to collect a separate judgment against Ecuador's government in an unrelated case," Donziger said in a statement. "Such selective enforcement in favor of a powerful litigant would undermine the rule of law for everybody."

Chevron meanwhile doubted that the farmers behind the suit in Lago Agrio could seize the arbitral award that the government of Ecuador must pay.

"On multiple occasions, the republic of Ecuador has committed to satisfy this award and the time has come to fulfill that commitment," Chevron spokesman Morgan Crinklaw said in a statement. "Any attempt by those behind the case against Chevron in Ecuador to disrupt payment of this award would be in furtherance of their corrupt scheme, which has already been found by a U.S. federal court to be an 'egregious fraud.'"

Donziger's Quito-based colleague Pablo Fajardo emphasized that this clients "have a lawful right to obtain this arbitral award and other company assets until their judgment is fully satisfied."

"Our people are suffering from a humanitarian crisis and many lives are at stake because Chevron, unlike BP in the United States, refuses to pay to clean up its own pollution," Fajardo added.

Chevron continues to deny and downplay the environmental and public health toll of Texaco's drilling.

Even though he ruled in Chevron's favor, Kaplan remarked that cleaning up the Amazon would be "desirable and overdue," but he sidestepped the issue of liability for the contamination to focus on the alleged fraud.

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