An Argentine court has ordered to seize US oil giant Chevron
Corp's assets in the country in order to carry out an Ecuadorean court ruling
that awarded $19 billion to plaintiffs in an environmental damage lawsuit in
the Amazon, a lawyer representing Ecuadoran plaintiffs yesterday said.
Argentine lawyer Enrique Bruchou told reporters in a conference call that Judge
Adrian Elcuj Miranda ordered the seizure of Chevron's assets in Argentina so
that the plaintiffs could collect the proceeds of a court order in a court in
Ecuador last year.
Residents of the Amazon rain forest in the Lago Agrio region in
Ecuador had filed a lawsuit in May against Chevron in Canada, Argentina and
Brazil seeking to seize the company's assets in these countries in order to
enforce an $18-billion ruling they won in a lawsuit in Ecuador for polluting
the Amazon basin. Since Chevron does not have any assets in Ecuador, the
lawyers for the plaintiffs had asked the courts in these countries to seize the
San Ramon, California-based oil giant's shares and assets in their respective
countries in order to enforce the Ecuador judgment.
Argentinian court's judge Miranda ordered that all cash flows
from sales and bank deposits be frozen until the entire $19 billion order by
the Ecuador court is collected. The rare order includes the entire shares and
dividends of Chevron in Argentina, its entire minority stake in the oil
pipeline transportation company Oleoductos del Valle, and 40 per cent of any
current or future money that Chevron Argentina holds as well as 40 per cent of
all its hydrocarbon sales.
Chevron said that it is not aware of the order from the
Argentinean court and its operations in the country had nothing to do with the
Ecuador lawsuit. ''The plaintiffs' lawyers have no legal right to embargo
subsidiary assets in Argentina and should not be allowed to disrupt Argentina's
pursuit of its important energy resources,'' said James Craig, a Chevron
spokesman for Latin America and Africa. ''The Ecuador judgment is a product of
bribery, fraud, and it is illegitimate.'' Although Chevron can file an appeal,
it would have to do so in Ecuador since the Argentinean judge ordered the
seizure based on the request by the Ecuadorean court.
Background
In the legal saga that has spanned nearly two decades, Chevron was held responsible by an Ecuadorian court in early 2011 for dumping chemical-laden wastewater in the Amazon basin from 1964 to about 1992 by Texaco Inc, a company that was acquired by Chevron in 2001. After an Ecuador appeals court upheld the lower court ruling, the plaintiffs threatened to seize Chevron's assets in foreign countries and freeze its international accounts. Chevron had previously alleged fraud in the case in which it is also facing accusations of defrauding the Ecuadorean court to hide the scale of the oil contamination. The suit was initially filed in a New York federal court in 1993 against Texaco.
Background
In the legal saga that has spanned nearly two decades, Chevron was held responsible by an Ecuadorian court in early 2011 for dumping chemical-laden wastewater in the Amazon basin from 1964 to about 1992 by Texaco Inc, a company that was acquired by Chevron in 2001. After an Ecuador appeals court upheld the lower court ruling, the plaintiffs threatened to seize Chevron's assets in foreign countries and freeze its international accounts. Chevron had previously alleged fraud in the case in which it is also facing accusations of defrauding the Ecuadorean court to hide the scale of the oil contamination. The suit was initially filed in a New York federal court in 1993 against Texaco.
Fearing an adverse order, Chevron in 2002 requested that the
case be shifted from US federal court to Ecuador. The trial court in Ecuador
had in February 2011, found that Chevron systematically dumped billions of
gallons of toxic waste into the Amazon rain forest for nearly three decades,
poisoning waterways that local inhabitants use for drinking, leading to cancer
among the inhabitants. The court set damages at $18 billion, $9.5 billion in
remediation costs and plaintiff damages, and an additional $8.6 billion if
Chevron refused to apologise for environmental damages. By the time the
judgment was announced in 2011, the case had wound its way through US and
Ecuadorean courts for over 17 years.
Chevron, which has been shifting the lawsuit between US and
Ecuadorean courts, has refused to pay the damages on the ground that it did not
pollute the jungle, and it had properly cleaned up the contamination for which
it was responsible. Chevron is also seeking to block enforcement of the
judgment under a treaty between the US and Ecuador. In February, it filed a
case before the Permanent Court of Arbitration in The Hague seeking its order
to stop the plaintiffs from enforcing the seizure of its assets globally, based
on the Ecuadorean court ruling.
''We plan to exercise our legal right to collect every penny of
the legitimate judgment from Ecuador, even if we have to drag Chevron kicking
and screaming into courts around the world,'' Pablo Fajardo, the lead lawyer
for the plaintiffs had earlier said. Fajardo told the Associated Press that the
plaintiffs will soon initiate proceedings against Chevron in Asia, Europe and
elsewhere. ''Environmental crime will not go without punishment and we're going
to chase them anywhere in the world,'' he said.
Chevron, which has a market capitilisation of $193 billion, has
constantly faced the wrath of its investors, who have urged the company to
settle the Ecuador litigation. Investors holding over 38 per cent of the
company's shares had voted for a resolution that challenged Chevron CEO John
Watson's authority on the Ecuador case. Nearly 40 institutional shareholders
have also urged the company to come to a settlement on the case. Many experts
have castigated the company for avoiding its responsibility just because
Ecuador is a third-world, developing country. They argue that had Chevron been
in BP's place, could it have dragged the issue on for nearly two decades
without paying a cent to the American people or the US government over the Gulf
of Mexico oil spill in 2010. In contrast to Chevron, London-based BP has not
only spent over $37 billion to date over the spill that caused the Gulf of
Mexico pollution in the region, but is facing thousands of lawsuits from
ordinary American citizens and four coastal states and various government
agencies. Not only is Chevron facing flak in Ecuador, in March, the Brazilian
government had filed criminal charges against the oil giant and its partners
and 17 of the companies' employees for environmental crimes in connection with
an oil leak off Rio de Janeiro's coast and is seeking $5.5 million in damages
and about $549,100 from each executive and a 31 years prison sentence. This is
over and above an earlier civil lawsuit seeking 20 billion reais ($10.7
billion) in damages.
Related links:
Argentina: Chevron's Assets Are Frozen http://www.nytimes.com/2012/11/08/world/americas/argentina-chevrons-assets-are-frozen.html
Argentine Judge Orders Chevron Asset Seizure, Plaintiffs Say http://www.sfgate.com/business/bloomberg/article/Argentine-Judge-Orders-Chevron-Asset-Seizure-4017393.php
Chevron assets frozen in Argentina over Ecuador case http://economictimes.indiatimes.com/news/international-business/chevron-assets-frozen-in-argentina-over-ecuador-case/articleshow/17137191.cms
Argentine judge embargoes Chevron assets: lawyer http://www.reuters.com/article/2012/11/07/us-argentina-chevron-idUSBRE8A62AL20121107
Argentina Judge Embargoes Up to $19 Billion of Chevron Assets – Lawyer http://news.google.com/news/url?sa=t&ct2=au%2F0_0_s_12_0_t&usg=AFQjCNHTCC5q6PvsZVEls8nW_wroitslpw&did=60acfad358c6b37d&cid=43981930422470&ei=a5GbUPjOLIzdkgWqIg&rt=STORY&vm=STANDARD&url=http%3A%2F%2Fwww.foxbusiness.com%2Fnews%2F2012%2F11%2F07%2Fargentina-judge-embargoes-up-to-1-billion-chevron-assets-lawyer%2F
Argentine Judge Orders Seizing 100% of Chevron Argentine Assets http://news.google.com/news/url?sa=t&ct2=au%2F0_0_s_13_0_t&usg=AFQjCNEmhbo6U4mT6ZrqclNI9jka7aVa1Q&did=5991db12fddcdb50&cid=43981930422470&ei=a5GbUPjOLIzdkgWqIg&rt=STORY&vm=STANDARD&url=http%3A%2F%2Fwww.sfgate.com%2Fbusiness%2Fbloomberg%2Farticle%2FArgentine-Judge-Orders-Seizing-100-of-Chevron-4016888.php
Argentine judge slaps embargo on $19 billion in chevron assets http://www.environmental-expert.com/news/argentine-judge-slaps-embargo-on-19-billion-in-chevron-assets-326157
Chevron Assets in Argentina Frozen over Ecuador Environmental Case http://www.industryweek.com/environment/chevron-assets-argentina-frozen-over-ecuador-environmental-case
Argentine Judge Freezes Chevron Assets In $19B Judgment Row http://www.law360.com/productliability/articles/392479/argentine-judge-freezes-chevron-assets-in-19b-judgment-row
Chevron Wants Docs On Ecuadoreans' Allegedly Tainted Report http://www.law360.com/environmental/articles/392479/chevron-wants-docs-on-ecuadoreans-allegedly-tainted-report
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