Ecuadorian villagers can sue Chevron Canada in Ontario

South American court had previously handed down $9.5B judgment against firm

OTTAWA— Ecuadorian villagers can sue Chevron in an Ontario court, the Supreme Court of Canada ruled.

Ecuador affirmed a $9.5-billion (U.S.) judgment against Chevron Corp. But the oil giant has no assets in the country, so the villagers decided to pursue its subsidiary, Chevron Canada.

The court’s decision marks a defeat for Chevron, which was trying to overturn an Ontario Court of Appeal decision. The 7-0 ruling allows the case to proceed in Canada, but it makes no finding on the merits of the long-running legal saga.

The key issue at play was whether there was a real and substantial connection between the villagers and the dispute on one hand, and the province of Ontario on the other.

The high court decided there was no need to prove that connection, as long as a foreign court assumed valid jurisdiction over the case.

“Canadian courts, like many others, have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments,” Justice Clement Gascon wrote. The Supreme Court made clear that it was not prejudicing any future decision in the case. But it said the Chevron entities had to show up in an Ontario court, where they were free to defend the action.

“A finding of jurisdiction does nothing more than afford the plaintiffs the opportunity to seek recognition and enforcement of the Ecuadorian judgment,” Gascon wrote.

“Similarly, should the judgment be recognized and enforced against Chevron, it does not automatically follow that Chevron Canada’s shares or assets will be available to satisfy Chevron’s debt.”

The decision upheld a December ruling by the Ontario Court of Appeal, which said the villagers could pursue their action for damages in a Canadian court.

The appeal court ruling overturned a lower court judge, who found that Chevron Canada should not be held responsible for the judgment because its assets are not directly owned by the California-based multinational.

The Ecuadorian villagers have not gone after Chevron in the U.S., because a New York judge ruled in favour of the company, saying the judgment in Ecuador was obtained through fraudulent means. That decision is under appeal.

Chevron said in a statement that the decision “has no bearing on the legitimacy or enforceability of the fraudulent Ecuadorian judgment.” It called the Ecuador court decision “illegitimate and unenforceable.”

The fraud judgment in New York was not an issue before the Supreme Court of Canada.

Amazon Watch, an advocacy group for aboriginal people in several Latin American countries, said the ruling shows the law has finally “caught up” with Chevron, accusing it of “spending billions on retaliatory legal attacks seeking to delay justice, rather than fulfilling its legal obligations.”