Chevron appeals illegitimate ruling in Ecuador

Source: Chevron Corporation

Chevron Corporation (NYSE:CVX) today announced that it has filed an appeal seeking review by Ecuador’s National Court of Justice of the adverse appellate judgment issued against the company in early 2012 by a panel of three temporary judges in the environmental lawsuit in Ecuador.

Chevron’s appeal, called a petition for cassation, details multiple legal grounds for reversal of the January appellate court decision. The appeal 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. The filing goes on to outline several other fundamental points, including: that the lower court’s judgment is unlawfully premised on fraudulent and scientifically baseless evidence; that the judgment is illegally based upon the retroactive application of law; that it ignores the releases of liability granted to Texaco Petroleum Co. (Tex Pet) by the government of Ecuador following a cleanup of Tex Pet’s share of remediation sites in the 1990s; and that the judgment awarded punitive and other damages never requested in plaintiffs’ complaint and not allowed under Ecuadorian law.

“Throughout the course of this litigation, judges corruptly operating in concert with the plaintiffs’ lawyers have created, rather than corrected, injustice,” said Hewitt Pate, Chevron vice president and general counsel. “Today’s appeal gives the National Court of Justice an opportunity to correct the grave injustices that have occurred in this case.”

In addition to the cassation appeal filing today, Chevron continues to seek recourse through legal proceedings outside of Ecuador. In the arbitration proceedings Chevron instituted against Ecuador in The Hague under the U.S.-Ecuador Bilateral Investment Treaty (BIT), the Tribunal issued an order on February 9, 2011, requiring Ecuador to take all measures at its disposal to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal. The Tribunal also recorded that if it were established that any judgment made by an Ecuadorian court in the Lago Agrio case was a breach of an obligation Ecuador owed to Chevron as a matter of international law, any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which Ecuador would be responsible to Chevron under international law.

Based on the Tribunal’s order, Chevron has asked that the Ecuadorian appellate court take all steps to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal, including suspension of any requirement that Chevron post a bond to prevent enforcement of the judgment during the cassation appeal. Any demand that Chevron post a bond in this case would be a violation of Ecuador’s international obligations under the order of the BIT Tribunal, and Chevron has no obligation to post such a bond.

The plaintiffs have indicated that they will seek to have Ecuador defy the BIT Tribunal’s 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. 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 also is pursuing an action in the U.S. District Court for the Southern District of New York against the Lago Agrio plaintiffs’ representatives for violations of the federal racketeering statute, common-law fraud and other relief based upon the overwhelming evidence of their fraud and corruption.

A copy of Chevron’s cassation appeal can be accessed at www.chevron.com/ecuador.


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