Chevron Loses Drilling Damages Case in Ecuador

(CN) - A judge in Lago Agrio, Ecuador, entered an "adverse judgment" against Chevron for at least $8 billion on Monday. What that judgment will mean for Chevron is uncertain at this time since a federal judge in Manhattan ruled last week that the Ecuadoreans suing Chevron could not collect any part of the $113 billion in damages they sought for damage to their rainforest community from decades of oil drilling.

Pablo Fajardo, the lead attorney for the Ecuadoreans, said he could not yet comment on the judgment in detail but that the decision "affirms what the plaintiffs have contended for the past 18 years about Chevron's intentional and unlawful contamination of Ecuador's rainforest."

A spokeswoman said that the team for the Ecuadoreans is still going over the judgment, but that it spells out "at least $8 billion" for the Ecuadorians.

Chevron immediately undercut the Lago Agrio judgment on its website as "illegitimate and unenforceable."

"It is the product of fraud and is contrary to the legitimate scientific evidence," according to Chevron's statement. The company added that it will appeal the decision in Ecuador.

After U.S. District Judge Lewis Kaplan granted Chevron a restraining order on Feb. 8, an international arbitration tribunal ordered the Republic of Ecuador to "take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against the First Claimant in the Lago Agrio case."

Chevron is in the eighth year of fighting the multibillion lawsuit in Lago Agrio over alleged environmental contamination by Texaco, which became a Chevron subsidiary in 2001. Over the last year, Chevron has sought discovery in courts across the United States to prove that its due process has been violated in Ecuador. It has pursued international arbitration to prove that its prosecution in Ecuador is an abuse of the criminal justice system and violates the Bilateral Investment Treaty between the United States and Ecuador and the United Nations Commission on International Trade Law.

Chevron also sued several parties to the Lago Agrio lawsuit in New York earlier this month for allegedly violating anti-racketeering laws.

In November 2010, Patton Boggs, one of the American law firms representing the Ecuadoreans, sued Chevron in Washington, D.C. The firm says Chevron's discovery actions amount to a "smear campaign" mean to intimidate lawyers from representing the Ecuadoreans.

Fajardo said Monday that the evidence presented in Ecuador speaks for itself.

"Rather than accept that responsibility, Chevron has launched a campaign of warfare against the Ecuadorian courts and the impoverished victims of its unfortunate practices," Fajardo said in a statement. "We call on the company to end its polemical attacks and search jointly with the plaintiffs for common solutions. We believe the evidence before the court deserves international respect and the plaintiffs will take whatever actions are appropriate consistent with the law to press the claims to a final conclusion."

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