Ecuador’s High Court Ignores Fraud, Upholds Judgment Against Chevron
National Court of Justice Violates International Obligations
Despite overwhelming evidence of fraud, bribery and corruption, Ecuador’s National Court of Justice ratified the fraudulent Lago Agrio judgment against Chevron Corporation, once again violating the nation’s international obligations and the rule of law.
Without any investigation, the National Court ignored uncontested proof of the plaintiffs’ lawyers’ fraud and collusion with the Provincial Court of Sucumbíos, which issued the $19 billion judgment in February 2011. In an attempt to give the false appearance of due process, the court eliminated the illegal “punitive damages” portion of the judgment against the company.
The court’s reduction of the judgment follows the strategy of manipulation and deceit laid out by plaintiffs’ lawyers in outtakes of the movie Crude, in which they discuss concocting an inflated damages figure so the judge could look reasonable when ordering a lower amount. Ecuadorian law does not allow the imposition of punitive damages, and the National Court’s elimination of them from the judgment does not make it any less fraudulent.
“The Lago Agrio judgment is just as illegitimate and unenforceable today as it was when it was issued almost three years ago,” said Hewitt Pate, Chevron vice president and general counsel. “The Government of Ecuador should be investigating the lawyers who are using its courts to commit fraud, rather than issuing another court opinion in furtherance of that fraud.”
With this ruling the court also disregarded a recent award by an international arbitral tribunal which found that the Settlement and Release Agreements that the Government of Ecuador entered into with Chevron’s subsidiary, Texaco Petroleum Company, released the company of any liability for all public interest or collective environmental claims. The Lago Agrio plaintiffs’ lawyers have repeatedly admitted, and the relief in the Lago Agrio judgment makes clear, that the plaintiffs’ claims are exclusively collective and not individual. Separate and apart from the fraud, this should have led to a complete dismissal of the case.
The company is reviewing the court’s decision to determine its legal options and next steps. In addition to the international arbitration pending against Ecuador in the Hague, Chevron has filed a civil lawsuit in the United States to hold the plaintiffs’ lawyers and consultants accountable for fraud, extortion and other misconduct associated with the Lago Agrio litigation. That case, brought under the federal anti-racketeering statute and other state laws, is currently in trial in a New York federal court.
Yesterday’s decision is not surprising. Refusing to investigate the blatant misconduct of the plaintiffs’ representatives and its own judges, the Republic of Ecuador has instead embarked on a global propaganda and intimidation campaign against Chevron and anyone who helps expose the ongoing fraud committed in the case against Chevron. This is a manifest denial of justice, and Chevron will continue to seek redress under international law.