Brazil’s High Court Rejects Attempt to Enforce Fraudulent Ecuadorian Judgment Against Chevron
Brazil’s Superior Court of Justice (STJ) unanimously rejected an attempt to enforce a fraudulent Ecuadorian judgment against Chevron Corporation on Wednesday, November 29, citing a lack of jurisdiction. The fraudulent judgment has now been rejected in Argentina, Brazil and the United States.
“Courts around the world continue to reject attempts to profit from this fraudulent judgment,” said R. Hewitt Pate, Chevron’s vice president and general counsel. “Today’s decision reinforces our belief that any jurisdiction that observes the rule of law will find the Ecuadorian judgment to be illegitimate and unenforceable.”
The STJ’s 10-0 vote follows a decision by an Argentine court on Oct. 31 denying recognition of the Ecuadorian judgment, also citing a lack of jurisdiction.
Prosecutors in both Brazil and Argentina had previously opined that the Ecuadorian judgment was unenforceable because it was the product of fraud and corruption. In 2015, Brazil’s deputy prosecutor general found that the judgment “was issued in an irregular manner, especially under deplorable acts of corruption that represent an offense against the international public order and even to good morals.”
In 2014, a U.S. federal court found the Ecuadorian judgment to be the product of fraud and racketeering activity. The court also found that Steven Donziger, an American lawyer behind the lawsuit, violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO), committing extortion, money laundering, wire fraud, Foreign Corrupt Practices Act violations, witness tampering and obstruction of justice in obtaining the Ecuadorian judgment. The court detailed its findings of fact in a nearly 500-page decision. The U.S. Court of Appeals for the Second Circuit unanimously affirmed the lower court’s decision in August 2016. In June 2017, the United States Supreme Court rejected Donziger’s petition seeking review of the case.
In January 2017, a Canadian court rejected an attempt to enforce the Ecuadorian judgment against Chevron’s subsidiary, Chevron Canada Limited. The court found that Chevron Canada Limited is a separate entity from Chevron Corporation, not a party to the Ecuadorian lawsuit and not a debtor to the judgment.
In December 2015, the Supreme Court of Gibraltar issued a judgment against Amazonia Recovery Ltd., a Gibraltar-based company set up by Donziger and his associates to receive and distribute funds resulting from the fraudulent Ecuadorian judgment. The court awarded Chevron $28 million in damages and issued a permanent injunction against Amazonia, preventing the company from assisting or supporting the case against Chevron in any way.
Chevron has never operated in Ecuador. Texaco Petroleum (TexPet), which became a subsidiary of Chevron in 2001, was a minority partner in an oil-production consortium in Ecuador along with the state-owned oil company, Petroecuador, from 1964 to 1992. After TexPet turned its remaining share of the oil operations over to Petroecuador in 1992, pursuant to an agreement with Ecuador, TexPet agreed to conduct a remediation of selected production sites while Petroecuador remained responsible to perform any remaining cleanup. The government of Ecuador oversaw and certified the successful completion of TexPet’s remediation and fully released TexPet from further environmental liability. Petroecuador, however, failed to conduct the cleanup it promised and has continued to operate and expand oil operations in the former concession over the past 20 years.
Chevron Corporation is one of the world’s leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company’s operations. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.