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Court Won’t Block $18B Chevron Judgment

MANHATTAN (CN) - The 2nd Circuit refused again to block indigenous Ecuadoreans from collecting on an $18.2 billion judgment against Chevron for a massive oil contamination in the Amazon.

The Delaware-based oil giant has been piling up defeats in its quest to discredit the lodestar award a Lago Agrio, Ecuador, court delivered on Feb. 14, 2011, after 18 years of bitter litigation.

Faced with the multibillion-dollar judgment last year, Chevron launched a three-pronged counterattack, including an appeal in Ecuador, arbitration at The Hague and an anti-racketeering suit in Manhattan federal court.

After some successes in New York's Southern District, the 2nd Circuit put a halt to a trial on whether to permanently block the Ecuadoreans from collecting the award. The federal appeals court also struck down an existing preliminary injunction.

On Thursday, the three-judge panel refused to revisit its September decision, to the exultation of the Ecuadoreans.

"The Ecuadorean communities affected by Chevron's contamination are one step closer to justice as a result of today's ruling," their spokeswoman, Karen Hinton, said in a statement. "For almost two decades, Chevron has stood in the way of a comprehensive cleanup of billions of gallons of crude oil and toxic wastewater it deliberately dumped into the pristine rainforest. Thousands of people have died or suffered as the oil giant and its legions of lawyers have fought to distract attention from the overwhelming evidence against the company."

Though Chevron said it is "disappointed" with the decision, it hopes The Hague will enforce a Feb. 9 order telling the Ecuadorean government to quash the Lago Agrio court's judgment.

"The order of the international BIT tribunal obligating Ecuador to prevent enforcement of the corrupt judgment pending the outcome of the BIT proceedings remains in place," spokesman Justin Higgs said in a statement, using the abbreviation for the bilateral investment treaty between the United States and Ecuador. "Chevron will also continue to prepare to resist any efforts by the plaintiffs to enforce the judgment in other countries in the event Ecuador chooses to defy the tribunal's order. Chevron has uncovered overwhelming evidence of fraud and does not believe that the Ecuador ruling is enforceable in any court that observes the rule of law."

The Ecuadoreans, who make fraud claims of their own against Chevron, say that The Hague's Feb. 9 order asks their government to kill their case in violation of the country's own constitution.

Ecuador asked the tribunal to lift the order.

After losing its first round of appeals in Ecuador, Chevron rebounded today (Friday) by seeking permission to bring the case to Ecuador's highest court, the National Court of Justice.

"Throughout the course of this litigation, judges corruptly operating in concert with the plaintiffs' lawyers have created, rather than corrected, injustice," Chevron vice president and general counsel Hewitt Pate said in a statement. "Today's appeal gives the National Court of Justice an opportunity to correct the grave injustices that have occurred in this case."

The Ecuadorean government is fighting Chevron's controversial allegations of judicial corruption in the U.S. Northern District of California, claiming that claims are part of the oil company's conspiracy to tarnish its judiciary in an entrapment scheme.

Opining that Chevron's options to fight the judgment are narrowing, the Ecuadoreans' spokeswoman says her clients would contemplate a settlement large enough to remediate the environmental and health impact of the oil contamination.

"Now a U.S. appellate court has refused to grant Chevron relief from blocking the $18 billion judgment of an Ecuadorian court that it should pay for a clean-up," Hinton said. "With its promise to fight the Ecuadoreans until hell freezes over, Chevron reveals its callous disregard for the rule of law and the humanity of indigenous groups. Chevron's legal options to evade the Ecuador judgment continue to narrow. Chevron's shareholders must now understand that the company's management team is putting their interests at great risk due to the company's bungling of the Ecuador litigation."

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