Chevron wins Ecuador ruling

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Steve Marshall

18 September 2013 12:58 GMT

Chevron has won an international arbitration ruling that releases it from environmental claims in relation to an ongoing class-action lawsuit over alleged oil pollution in Ecuador’s remote Lago Agrio region.

The US giant is facing what it terms a “fraudulent” $19 billion court judgement issued against it in the case brought by Ecuadorian villagers who claim the company is liable for contamination of the Amazon rain forest area caused by Texaco, which was subsequently acquired by Chevron.

Chevron contends its clean-up obligations have been met and asserts it has been fraudulently blamed for problems created by state player PetroEcuador, which operated the site after Texaco moved out.

The latest decision by the arbitration tribunal in The Hague determined that agreements between the government and Chevron subsidiary TexPet made in the 1990s released the latter of “any liability for all public interest or collective environmental claims” such as the one brought against it by the Lago Agrio plaintiffs, according to a statement.

"The game is up. This award by an eminent international tribunal confirms that the fraudulent claims against Chevron should not have been brought in the first place,” said Chevron vice president and general counsel Hewitt Pate.

“It is now beyond question that efforts by American plaintiffs lawyers and the government of Ecuador to enforce this fraudulent judgment violate Ecuadorian, US and international law," he added.

It follows a tribunal ruling earlier this year that decided Ecuador was in violation of international law by failing to stop plaintiffs in the case from taking their legal battle to courts in Argentina and other countries to freeze assets.

An Ecuador court has ruled that Chevron must pay damages of $19 billion to plaintiffs in the case, although the company claims to have found evidence that lawyers participated in fraud to secure the judgement.

The tribunal has earlier ruled that, if Chevron wins the arbitration, Ecuador could be held responsible for any company losses arising from enforcement of the judgement.

The next arbitration hearing to take place in January next year will examine alleged collusion between the Ecuadorian court and the Lago Agrio plaintiffs.