Ecuador court rejects injunction on Chevron fine

[JURIST] The Provincial Court of Justice of Sucumbios in Lago Agrio, Ecuador denied an arbitration decision [interim order, PDF] by The Hague Permanent Court of Arbitration (PCA) [official website; case materials] on Friday, forwarding an appeal by Chevron [corporate website] to the Supreme Court of Ecuador. The decision intended to temporarily enjoin the recently upheld $18 billion fine [JURIST report] from any international efforts of collection. The interim injunction would last until the PCA makes its final arbitration decision. The Provincial Court of Justice rejected this approach, stating that Ecuadorian citizens' human rights supersede international trade law [Ecuador Times report]. They also allowed Chevron's appeal [JURIST report] to ascend to the Supreme Court of Ecuador. The injunction is supposed to be upheld by all countries that are signatories to The Hague Convention, but plaintiffs insist they will continue to pursue their collection efforts in other courts, including the US Second Circuit Court of Appeals [JURIST report].

Damages were initially awarded last February by the Provincial Court of Justice of Sucumbios, which found that Texaco, acquired by Chevron in 2001, polluted large areas of the country's rain forest and the Amazon river. Chevron has argued that the damages award violates Ecuador's constitution because the court failed to correct or punish alleged fraud and corruption committed by plaintiffs' lawyers. Also, Chevron contended that because it inherited the case from its takeover of Texaco, an oil company who was released from such liability by Ecuador in the 1990s, it too should be released from liability. The judgment was upheld in January [JURIST report] by a three-judge panel of the Provincial Court of Justice of Sucumbios. Though the fine was initially set at $8.6 billion [JURIST report], it was more than doubled for Chevron's refusal to pay "moral reparations" to the Ecuadorian government, as required by the original ruling. The Amazon Defense Coalition [advocacy website], the Ecuadorian plaintiffs, have said that the first judgment was a reaffirmation of how Chevron's greed and criminal misconduct in polluting the region has led to death and disease.

 

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.