Bloomberg News

Canada Judge in $12 Billion Chevron Case May Delay Ruling

November 30, 2012

A judge will decide in February whether a trial can proceed in Ontario over a claim by Ecuadorean villagers trying to seize $12 billion of Chevron Corp. (CVX:US)’s Canadian assets.

Superior Court Justice David Brown concluded two days of hearings today on the asset-seizure request filed in Toronto by lawyers for 47 Ecuadoreans. A court in the Latin American country last year found Chevron liable for 28 years of soil and water pollution near oil wells that ruined the health and livelihoods of Amazon rainforest dwellers.

Ecuadorean farmers and fishermen have been trying to collect $19 billion in environmental damages from San Ramon, California-based Chevron, the world’s fourth-largest oil company. The plaintiffs are seeking enforcement outside their home country because Chevron has no refineries, oil wells, storage terminals or other properties in the nation.

Chevron has refused to pay the judgment or entertain the notion of settlement talks because it maintains the ruling resulted from bribery and fraud, charges that lawyers and a spokeswoman for the plaintiffs have rejected.

Brazil, Argentina

Following the filing of their Canadian seizure request in May, the Ecuadoreans sought similar forfeitures in a Brazilian tribunal in June and in Argentina earlier this month. A judge in Buenos Aires ordered some Chevron bank deposits held in escrow while the case is pending, Enrique Bruchou, a lawyer for the Ecuadoreans, said in a Nov. 7 interview.

Lawyers for the Amazon River basin residents have estimated the value of Chevron’s Canadian assets at $12 billion.

Alan Lenczner, an attorney representing the Ecuadoreans, disputed Chevron’s contention that its Canadian assets should be shielded from seizure because he said its units in the country are not separate entities from the parent corporation.

“Chevron Canada are the assets of Chevron Corp.,” Lenczner said during a hearing in Toronto today.

“We believe the only path to a constructive resolution of this matter requires the participation of the government of Ecuador,” Justin Higgs, a Chevron spokesman, said in an e-mail today. “Unfortunately, the Republic has rebuffed all attempts at a constructive dialogue.”

Judgment’s ‘Integrity’

“If the plaintiffs’ lawyers believed in the integrity of their judgment, they would be seeking enforcement in the United States -- where Chevron Corporation resides,” Higgs said, pointing to the judge’s statements that the case should be tried in New York.

The ruling last year by a provincial Ecuadorean court blamed decades of toxic soil and water contamination on Texaco Inc., which Chevron acquired in 2001. Texaco was found to have discharged into the environment saltwater and other byproducts of oil drilling. Texaco quit the country and its equipment was taken over by the Ecuadorean state oil company in 1992.

“We look forward to continuing to work towards collecting the full amount of our judgment,” Graham Erion, spokesman for the plaintiffs, said today in an e-mail. The funds would be used “to force Chevron to clean up its mess” and provide health care and resources after “this company’s willful contamination”

Chevron fell (CVX:US) 0.1 percent to $105.69 at the close in New York. The shares have increased 2.8 percent in the past 12 months.

Exxon Mobil Corp. (XOM:US) is the world’s biggest oil company by market value, followed by PetroChina Company Ltd. and Royal Dutch Shell Plc (RDSA), according to data compiled by Bloomberg.

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • CVX
    (Chevron Corp)
    • $114.0 USD
    • -1.09
    • -0.96%
  • XOM
    (Exxon Mobil Corp)
    • $93.13 USD
    • -0.52
    • -0.56%
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