Ecuador Judges Thwart Chevron's Bid To Avoid $18 Billion Judgment

   on March 30 2012 12:06 PM
Ecuador Chevron
Humberto Piaguaje, a tribal leader of the indigenous Secoya people of Ecuador, holds up a letter to the American people, in Washington in May 2011. The letter denounces environmental damage caused by Texaco, now owned by Chevron. Reuters

Chevron Corp. (NYSE: CVX), the second largest U.S. oil company, lost its fourth attempt to avoid paying $18 billion in environmental fines for polluting tracts of the Amazon.

The case stems from a decade's worth of lawsuits which alleged Texaco, now a Chevron subsidiary, failed to clean up large swaths of the Amazon jungle in Ecuador.

A three-judge panel in Ecuador Wednesday struck down Chevron's latest request that enforcement of the judgment against it be blocked.

This latest decision yet again confirms what we have been saying for years, said Pablo Fajardo, the lead Ecuadorian lawyer. Chevron is guilty of extraordinary greed that has created a humanitarian crisis in Ecuador that puts thousands of people at risk.

In February 2011, an Ecuadorean court found Chevron liable and ordered the San Ramon, Calif., company to pay $18 billion for pollution left behind by Texaco.

Texaco operated in the country for several decades until the early 1990s.

Ecuador Judge Dismissed

In 2001, the company was bought by Chevron, which then tried to get the case dismissed on grounds Chevron itself didn't pollute Ecuador's jungle. Chevron has maintained the case against it is malicious and fraudulent.

This month, Chevron officials mounted a new case against paying the judgment by questioning the conduct of Judge Nicholas Zambano - the presiding judge in the case in Ecuador - after he was dismissed for improperly freeing an alleged drug trafficker in an unrelated case.

Separately, in New York on March 15, U. S. District Judge Lewis Kaplan took under advisement Chevron's request that its assets be attached to the court for as long as Kaplan presides over a racketeering case Chevron filed against the Ecuadorean plaintiffs.

In Chevron's view, this action would immunize the company against the Ecuadorean claims.

The 2nd U.S. Court of Appeals in New York previously threw out an injunction filed by Kaplan to bar the enforcement of the $18 billion fine. The court also turned down a Chevron request to throw out the case.

Chevon Asset Seizures

On Feb. 28, an international arbitration panel in The Hague said it will consider an appeal by Chevron, and has tried to enjoin Ecuadorean officials from enforcing the judgment. Ecuadorean courts have so far rejected every request for an injunction.

Prosecutors in Ecudador have said they can start seizing Chevron's assets throughout the world, and alluded to seizing the company's tanker ships as they sail through the Panama Canal.

Chevron still has a pending appeal with Ecuador's national court.

A request for comment by Chevron wasn't returned.

Chevron shares fell 14 cents to $106.71 by midday Friday.

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