Today, Reporting Justice Luis Felipe Salomão, of Brazil’s Superior Court of Justice (STJ), issued his vote rejecting the attempted recognition of the $9.5 billion Ecuadorian judgment against Chevron Corporation. Justice Salomão cited a lack of jurisdiction and extensive evidence of fraud and corruption that would make its recognition a violation of public policy.
The Reporting Justice’s vote to the STJ is consistent with the findings of courts and authorities in multiple jurisdictions, including Brazil’s Federal Public Prosecutor’s Office (MPF), that found the Ecuadorian judgment to be illegitimate and unenforceable. The other members of the court’s Special Chamber are studying Justice Salomão’s vote before rendering a final decision. In response to today’s opinion, Chevron issued the following statement:
“Today’s opinion is soundly reasoned, unequivocal and consistent with findings from other jurisdictions around the world regarding the illegitimacy of the fraudulent Ecuadorian judgment against Chevron Corp. We continue to believe that any court that observes the rule of law will similarly find the Ecuadorian judgment illegitimate and unenforceable.”
Background
On June 26, 2012, plaintiffs’ lawyers led by U.S. attorney Steven Donziger filed a lawsuit with Brazil’s Superior Court of Justice seeking recognition of the fraudulent $9.5 billion judgment from Ecuador against Chevron Corporation. Similar judgment recognition actions have been filed in Argentina and Canada.
In 2014, Donziger and his Ecuadorian associates were found by a U.S. federal court in New York to have 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 and in trying to cover up the criminal conduct by him and his associates. The court detailed its findings in a nearly 500-page decision, concluding the judgment could not be enforced in the United States.
The U.S. Court of Appeals unanimously affirmed the lower court’s decision in August 2016 and the U.S. Supreme Court this year let the RICO decision stand.
The Ecuadorian plaintiffs’ attempts to enforce the fraudulent judgment in other jurisdictions have also been met with resistance.
Public prosecutors in Brazil and Argentina issued opinions in May 2015 and April 2016, respectively, recommending their courts reject the Ecuadorian judgment. Brazil’s Deputy Prosecutor Nicolao Dino stated evidence showed 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 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 remediate selected production sites while Petroecuador remained responsible for all remaining cleanup.
The government of Ecuador oversaw and certified TexPet’s successful 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 25 years.
