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Canada dismisses Chevron appeal in Ecuador oil cleanup case

Published:Sunday | September 6, 2015 | 9:00 AM

The Supreme Court of Canada on Friday dismissed an attempt by oil giant Chevron to block Ecuadorian villagers from using an Ontario court to collect billions in damages over rainforest pollution.

The 7-0 ruling allows the case to proceed.

The lead attorney for the plaintiffs, Pablo Fajardo, said the ruling "... isn't just any triumph. We've won in a country that is among the most credible in the world for its judicial transparency."

Lawyers have fought for years in several countries over who is responsible for pollution in the Ecuadorian rainforest. They have argued that the case should be heard in Canada because US-based Chevron has a Canadian subsidiary.

In February 2011, a judge in Ecuador issued a US$18 billion judgment against Chevron in a lawsuit brought on behalf of 30,000 residents. The judgment was for environmental damage caused by Texaco during its operation of an oil consortium in the rainforest from 1972 to 1990. Chevron later bought Texaco.

Ecuador's highest court later upheld the verdict but reduced the judgement to about US$9.5 billion.

Chevron argues that a 1998 agreement Texaco signed with Ecuador after a US$40 million clean-up absolves it of liability. It claims Ecuador's state-run oil company is responsible for much of the pollution in the oil patch that Texaco quit more than two decades ago.

The key issue at hand regarding Friday's ruling was whether there was a real and substantial connection between the villagers and their dispute and the province of Ontario.

The high court decided there was no need to prove that connection, as long as a foreign court assumed valid jurisdiction over a case.

"Canadian courts, like many others, have adopted a generous and liberal approach to the recognition and enforcement of foreign judgements," Justice Clement Gascon wrote for the court.

Lawyers for the villagers have turned to courts in Brazil and Argentina, as well as in Canada, to collect.

Lawyers have not pursued Chevron in the United States, where a New York judge ruled in favour of Chevron's counter-suit that argued the judgement from the Ecuador courts was obtained fraudulently by corrupt means. That New York decision is now being appealed.

- AP