Court clears way for villagers’ lawsuit

TORONTO — Ecuadorian villagers do not need to put up almost $1 million before they can pursue a claim against oil behemoth Chevron, Ontario’s top court ruled Tuesday.

In its decision, the Court of Appeal said it would be unfair to force the villagers to put up the cash deposit to cover Chevron’s legal costs should they lose their challenge.

“An order for security for costs should only be made where the justness of the case demands it,” the Appeal Court said. “Courts must be vigilant to ensure an order that is designed to be protective in nature is not used as a litigation tactic to prevent a case from being heard on its merits.”

The villagers are asking the Canadian courts to make Chevron Canada pay a hard-fought US$ 9.5billion award they won in Ecuador against U.S.-based Chevron Corp. in 2013 for environmental devastation and the health problems caused.

While the Supreme Court has said the group’s case can be heard here, an Ontario judge ruled Chevron Canada is a separate entity and can’t be held liable for the judgment against its parent. The Ecuadorians are appealing that ruling, but a judge had ordered them to first put up $943,000 to cover Chevron’s legal costs if they lose.

The villagers argued they couldn’t come up with that kind of money, and forcing them to do so would thwart their attempt to pursue their case against a wellresourced, determined company.

“Chevron Corporation has and, it may be anticipated, will employ all available means to resist enforcement of the Ecuadorian judgment,” the Appeal Court said. “This reality makes it difficult to accept that the motion for security for costs was anything more than a measure intended to bring an end to the litigation.”

The villagers first sued in 1993 after Texaco, later bought by Chevron, polluted about 1,500 sq. km of rain forest, fouling streams, drinking water and garden plots. They ultimately won the US$ 9.5billion judgment in Ecuador but the company insists the award was obtained fraudulently. The Canadian action, begun in 2012, aims to have Chevron Canada pay the money on the basis that it has a “significant” relationship with its parent.

THE ASSOCIATED PRESS FILES Ontario’s Court of Appeal has ruled Ecuadorian villagers don’t have to put up nearly $1 million before pursuing a claim against Chevron Canada to cover the company’s cost if they lose their claim.