Chevron Continues Battle to Dodge $9bn Ecuador Compensation

The oil company is fighting to avoid the award made to 30,000 Ecuadorean citizens severely affected by the dumping billions of gallons of toxic waste in the Amazon.

20 April 2015

Oil Giant Chevron Corp called on a U.S. appeals court Monday to stand by a 2014 decision claiming an US$9.5 billion compensation package to Ecuadoreans had been secured fraudulently.

According to Chevron's lawyers, the case of Steven Donziger, a U.S. lawyer for a group of Ecuadoreans that sued the company, was "shot through with fraud."

Donziger's lawyer retorted that allowing the oil giant, which has spent years and hundreds of millions of dollars on trying to dodge the compensation claim, to launch an "impermissible collateral attack" on the ruling of Ecuadorean court set a dangerous precedent for the future. It will "open the door to attacks on judgments from around the world?" Deepak Gupta, Donziger's lawyer, said.

Gupta also noted that Chevron's key witness to prove the original case was "fraudulent," Judge Alberto Guerra, had been handsomely rewarded by the company with at least US$326,000, an immigration lawyer and a car.

Rural workers and indigenous peoples have been locked in legal battle with Chevron, seeking to collect US$9.5 billion that was awarded to them in February 2011 in an Ecuadorean compensation for devastating environmental damage caused by the company in Ecuador's Amazonian.

Between 1964 and 1990, oil company Texaco – which merged with Chevron in 2001 – is accused of causing one of the world's greatest environmental disasters. It created a social disaster for the poor farmers and indigenous people living there by contaminating the rivers used for drinking, bathing and fishing.

At the ruling on Monday, Circuit Judge Richard Wesley pointed out that the judge who claimed the original case awarding the compensation to be corrupt, U.S. District Judge Lewis Kaplan, could be contradicted by an arbitration panel.

According to Courthouse News Service, at the ruling on Monday, Circuit Judge Richard Wesley Wesley "appeared deeply skeptical that Kaplan had the authority to issue his ruling." Furthermore, the website explains that Wesley and other colleagues agreed as such three years ago calling it a "radical" decree.

The judge also noted that the outcome of the appeal could also be affected by a separate tribunal of Chevron against the Ecuadorean state in the Permanent of Arbitration in The Hague.

Hearings beginning Tuesday on that case, and due to last around three weeks, could negate Kaplan's dismissal of Ecuador's judicial system.

This, separate, action, relates to an agreement made between Texaco and a previous Ecuadorean government, that as long as it continued a certain level of investment, the company could not be held legally responsible for damage.

Ecuador's Attorney General, Diego Garcia, will argue that that agreement is void because the company had ceased to invest in the country five years before the agreement took effect.

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