Chevron Files Appeal with Ecuador National Court

  on January 20 2012 6:27 PM
A Ecuadorean Cleans Up The Amazon
Ecuadoran workers clean up an oil waste pit owned by state-owned company Petroecuador in Shushufindi. Reuters

The Chevron Corp. announced Friday it has filed an appeal with Ecuador's National Court of Justice to review what the company calls an illegitimate ruling made against it this year.

This month, three judges in the Provincial Court of Justice of Sucumbrios in Lago Agrio in Ecuador upheld a lawsuit that Chevron appealed. The company had been ordered to pay $18 billion for damages it maintains it has not caused.

The original ruling came last February. The same month, the Permanent Court of Arbitration in The Hague issued an injunction following a Chevron appeal, ordering Ecuadorean officials not to collect the $18 billion until the international panel makes its own pronouncement.

Last September 2011, a U.S. appeals court ruled the country is allowed to collect on the ruling, and on Thursday, the U.S Court of Appeals in the Second Circuit denied Chevron's attempt to impose a worldwide injunction.

Despite The Hague's pronouncement, which is based on the U.S.-Ecuador Bilateral Investment Treaty, Chevron claims the litigants are moving to collect.

The plaintiffs have indicated that they will seek to have Ecuador defy the [Bilateral Investment Treaty] Tribunals order by pursuing enforcement of the corrupt judgment outside of Ecuador before the BIT Tribunal has an opportunity to review the merits of the case, read Chevron. In the event the plaintiffs carry through on their threats to file enforcement actions against Chevron affiliates in other countries, Chevron will take appropriate steps to defend against this fraud.

Chevron spokesman Justin Higgs said the company does not know when The Hague will come with its final judgement.

South American officials are trying to hold Texaco accountable for alleged toxic pits Texaco failed to clean up after it operated in the country from the 1960s to 1992. Texaco was bought by Chevron in 2001.

Chevron disputes the legitimacy of the Ecuadorean proceedings, claiming that Ecuador is racketeering the company. The case has been going back and forth for the greater part of a decade.

The appeal, read Chevron's announcement, establishes that the lower courts violated the Ecuadorian constitution by refusing to take any corrective action in response to the extensive fraud and corruption committed by plaintiffs lawyers and their representatives.

Fadel Gheit, an analyst with Oppenheimer who follows the company, agrees.

If I was ruling Chevron, I would fight until the very last minute of my job, and make sure the next guy behind me will not pay them anything, Gheit said. They are a bunch of scam artists.

Gheit said Chevron has no choice but to fight the lawsuit to the end, because paying would set a precedent that other people across the globe could try exploiting.

He added the judgement the Ecuadorean plaintiffs are seeking is way out of line.

When Union Carbide in 1984 leaked toxic gas into the air in India, killing 15,000, it was and still it regarded as the worst industrial accident. At the time the company settled with the Indian Government for $470 million. The seven found guilty, in 2010, faced two years in prison and paid $2,175 a piece. The company also paid an additional $10,800 fine.

Chevron maintains Texaco cleaned the tracts of land it was responsible for.

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