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Chevron Corp.’s Ecuador case is unfolding in many jurisdictions around the world, but Ontario is emerging as one of the most important.
Last Friday, the Supreme Court of Canada decision gave plaintiffs from Ecuador a green light to ask an Ontario judge to recognize and enforce in Canada a US$9.5 billion judgment debt. The plaintiffs obtained the judgment against Chevron in an Ecuador court back in 2011.
This was a big win for the Ecuador plaintiffs. Yet buried deep within the Supreme Court judgment is recognition that the enforcement action will be no slam dunk. Indeed, the Supreme Court has merely set the stage for a huge legal showdown between the company and the Ecuadorian plaintiffs in an Ontario courtroom.
In a separate U.S. proceeding, Chevron convinced a U.S. federal judge that the Ecuador ruling was an “egregious fraud.” That fraud finding will be tested yet again in Ontario as the Canadian enforcement proceeding continues.
The Supreme Court dealt only with a question of whether the case was properly brought in Ontario. The court did not endorse the underlying Ecuadorian legal case. In 2011, 47 plaintiffs from Ecuador, who represent a community of 30,000 in the Amazon jungle, won a US$9.5 billion judgment that found Chevron responsible for pouring billions of gallons of contaminated water near their homes over an 18-year period.
The Supreme Court pointed out that if the Ecuadorians seek to enter their case for “recognition and enforcement” in Ontario, Chevron has access to a range of defences. Chevron can claim the Ecuadorian decision was fraudulently obtained.
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