Ecuado­rian-Chevron fight back in court

ECUADO­RI­ANS SET TO PRESS AP­PEAL AGAINST OIL GI­ANT CHEVRON OVER US$9.5B AWARD

Lethbridge Herald - - BUSINESS & AG NEWS - Colin Perkel THE CANA­DIAN PRESS — TORONTO

Ecuado­rian vil­lagers are set this week to try again to hold Chevron Canada legally li­able for a huge award against the oil com­pany’s U.S.-based par­ent for what they say are the se­ri­ous health ef­fects they suf­fered from dev­as­tat­ing environmental pol­lu­tion decades ago.

The vil­lagers will be ask­ing On­tario’s top court to up­end an ear­lier rul­ing that they can­not go af­ter the Cana­dian com­pany for the US$9.5-bil­lion award they won in Ecuador against Chevron Corp.

The hear­ing on Tues­day and Wed­nes­day be­fore the On­tario Court of Ap­peal is the lat­est tan­gle in the in­tense, take-no-pris­on­ers lit­i­ga­tion — and pub­lic relations war — fought over years and in sev­eral coun­tries. How­ever, it could also prove fa­tal to the Ecuado­rian at­tempt to in­volve Canada in the pro­tracted bat­tle in which both sides ac­cuse the other of act­ing crim­i­nally or play­ing legally and eth­i­cally dirty tricks.

The ap­peal turns on a judg­ment from Jan­uary 2015 when Su­pe­rior Court Jus­tice Glenn Hainey threw out the vil­lagers’ case on the ba­sis that Chevron Corp. and Chevron Canada are two dis­tinct en­ti­ties, and that the lat­ter can’t be held li­able for the debts of the for­mer. The plain­tiffs, in other le­gal words, could not “pierce the cor­po­rate veil,” Hainey ruled.

In their writ­ten ar­gu­ments be­fore the Ap­peal Court, the Ecuado­ri­ans call that premise ab­surd. They main­tain Chevron Corp. has col­lected more than US$25 bil­lion in div­i­dends from its wholly owned oper­at­ing sub­sidiaries, in­clud­ing Chevron Canada.

“What prin­ci­ple of jus­tice is ad­vanced that al­lows Chevron par­ent’s share­hold­ers to col­lect at least US$25 bil­lion in div­i­dends and yet ex­cludes the en­force­ment of a judg­ment against Chevron Canada, 100 per cent owned by Chevron par­ent?” their factum states. “Heads, Chevron par­ent and its share­hold­ers win; tails, Chevron par­ent vic­tims lose and suf­fer.”

Chevron, with 1,500 sub­sidiaries and $225 bil­lion an­nual rev­enues, in­sists the Ecuado­rian judg­ment should not be hon­oured un­der any cir­cum­stances.

“The Ecuado­rian judg­ment was ob­tained by fraud from a cor­rupt le­gal sys­tem, in­clud­ing by the brib­ing of the trial judge,” the com­pany says in its factum. “It would be con­trary to Cana­dian pub­lic pol­icy and nat­u­ral jus­tice to rec­og­nize and en­force the Ecuado­rian judg­ment.”

Even if the award were valid, the com­pany ar­gues, Hainey was cor­rect to rule it could only be en­forced against Chevron Corp. and not the Cana­dian sub­sidiary, which no one ac­cuses of wrong­do­ing in Ecuador.

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