Appeal court says Canada can hear Ecuadorian pollution case

The Ontario Court of Appeal has overturned a lower court decision and is allowing a lawsuit by a group of Ecuadorian villagers against Chevron to go ahead in Canada.

A three-justice panel says the group, which wants Chevron Canada to be held responsible for a multi-billion-dollar judgment awarded in Ecuador, can have their case heard in Ontario.

“After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction,” according to the decision released.

The panel also ordered Chevron Corp. and Chevron Canada to pay $100,000 of the plaintiffs’ legal costs.

In May, a lower Ontario court sided against the villagers and granted a stay in the action, ruling that the company’s Canadian arm should not be on the hook for the judgment because their assets are not directly owned by the California-based multinational company.

The villagers had argued Chevron Canada has billions of dollars in assets it could use to pay the judgment, but the lower court ruled the long-standing legal battle did not belong in Ontario courts.

“In my view, the parties should take their fight elsewhere to some jurisdiction where any ultimate recognition of the Ecuadorian judgment will have a practical effect,” Justice David Brown wrote in the decision which was overturned.

The appeal court ruled the villagers deserve to have their day in court, even if their chances of winning may be small.

In 2011, an Ecuadorian judge ordered Chevron Corp. to pay US$19 billion to 30,000 villagers for black sludge contamination of a rainforest in the Amazon between 1972 and 1990 by Texaco, which it bought in 2001. Last month, Ecuador’s highest court upheld the judgment but lowered the amount to US$9.51 billion.

Chevron maintains it won’t pay because it contends that Texaco had signed an agreement with Ecuador in 1998 and paid $40 million to clean the pollution, and was absolved of any future liability. But the villagers argue that the agreement does not exempt the company from third-party claims.

Source: Linda Nguyen | The Canadian Press