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Move against Chevron in Canada first of many: Ecuadorean plaintiffs

Protesters march during a protest outside the annual meeting at Chevron Corp. headquarters in San Ramon, Calif., on Thursday.

KEVIN BARTRAM/REUTERS

Lawyers for the Ecuadorean villagers who won an $18.3-billion (U.S.) judgment against Chevron Corp. over oil pollution in the Amazon say their enforcement action launched in Canada this week is only their first move to target the company's worldwide assets.

"This is just the beginning. We are analyzing and we are preparing a series of enforcement actions that are going to be presented all around the world in the near future," lead Ecuadorean lawyer Pablo Fajardo, speaking through a translator, told reporters on a conference call Thursday.

He vowed to pursue Chevron until it paid the $18.3-billion an Ecuadorean court ruled the company owed for cleanup costs and punitive damages in a judgment last year: "We are going to go after Chevron until each and every single penny it owes to the Ecuadorean people for the damage they caused."

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Mr. Fajardo said Wednesday's filing of a claim in Ontario Superior Court in Toronto demanding that Chevron hand over its Canadian assets would be followed by another similar action in another country, likely in June, although he said he did not know where.

Chevron claims the Ecuadorean judgment is tainted by bribery and fraud, and calls it "illegitimate."

Kent Robertson, a spokesman for Chevron, said in an interview that the company would fight back in court wherever the plaintiffs file: "We are prepared to defend the company, wherever they take their fraud."

The move to export the dispute to Canada and elsewhere opens a new chapter in the tangled and nearly 20-year legal fight. The battle against Chevron centres on allegations that open pits of toxic oil waste were left behind when Texaco, which Chevron acquired in 2001, pulled out of the Ecuadorean jungle in the early 1990s.

Chevron has fought back fiercely. It accuses some of the plaintiffs' lawyers and supporters of bribery, fraud and fabricating evidence in a lawsuit filed in New York.

The company refuses to pay up despite participating in the marathon eight-year trial, arguing that Texaco was released from liability when it paid $40-million to remediate Amazon oil sites in the 1990s and that "legitimate scientific evidence exonerates Chevron."

The plaintiffs, who deny the allegations against them and also allege Chevron has engaged in fraudulent conduct, say they chose Canada for their first stop partly because of the judicial system's tradition of accepting foreign judgments. Chevron is based in San Ramon, Calif., and has virtually no assets left in Ecuador.

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Legal observers suggest that filing in the U.S. could see the claim tangled with the New York lawsuit's fraud allegations against the plaintiffs' lawyers and supporters.

Chevron, in a statement issued Wednesday, said the plaintiffs were shying away from the U.S., where they would "be confronted by the fact that seven federal courts have already made findings under the crime/fraud doctrine about this scheme."

Mr. Fajardo said it was Chevron that, for much of the legal fight that began with a case filed in New York in 1993, sought to have it litigated outside the United States.

"We must remember that this trial was first started in the U.S. in 1993," Mr. Fajardo said. "It is essential that we keep in mind that Chevron did whatever it could to have this case moved out of the U.S. and into Ecuador."

He has retained prominent Toronto litigator Alan Lenczner to take the case here. Mr. Lenczner said that more than 75 per cent of Chevron's assets are outside the United States and that Canada was simply chosen as a starting point to go after the company.

"We're not afraid of Chevron. We will meet them in any court, anywhere, but we don't have to got to the United States," Mr. Lenczner told the conference call.

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"We'll make the decision where we're going and Canada has been chosen. And we'll let a Canadian court, which I think the whole world respects, deal with this matter."

The move to file a claim in Ontario came as Chevron held its annual general meeting Wednesday in San Ramon, and chairman and chief executive officer John Watson faced criticism about the lawsuit as about 150 protesters with various complaints about the company's operations around the world gathered outside.

Chevron is also pursuing a case against the Ecuadorean government over the dispute before an international arbitration panel in The Hague.

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About the Author
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. He spent six years as the law reporter in The Globe’s Report on Business, covering Bay Street law firms and writing about fraud, insider trading and corporate tax avoidance. More

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