An Argentine judge embargoed Chevron Corp.’s assets in Argentina to carry out an Ecuadorean court order that awarded $19 billion to plaintiffs in an environmental damage lawsuit in the Amazon, a lawyer said Wednesday.
Judge Adrian Elcuj Miranda ordered the freezing of Chevron’s assets in Argentina as plaintiffs try to collect the judgment won in Ecuador last year, Argentine lawyer Enrique Bruchou told reporters in a conference call.
The order states that all the cash flows from sales and bank deposits be frozen until the $19 billion is collected, Bruchou said. The order applies to 100 percent of Chevron’s capital stock in Argentina, 100 percent of its dividends and its entire minority stake in Oleoductos del Valle. It also includes 40 percent of any current or future money that Chevron Argentina holds as well as 40 percent of all its crude sales.
Bruchou said the decision in the largest environmental suit in the world should send a strong message to foreign investors that they must apply the same environmental standards wherever they do business. Similar lawsuits have been filed this year in Canada and Brazil.
“We’re making history in the preservation of the environment,” Bruchou said.
“This is a ruling that sets an example. What we’re telling the world is that in Latin America we want to demand that whoever comes to exploit does it following the same health and environmental standards as they do in their countries of origin,” he said.
Chevron officials said the company knew of neither a filing by the plaintiffs nor an order from a court in Argentina. They also said Chevron’s operations in Argentina had nothing to do with the case in Ecuador.
“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.”
Chevron has refused to pay the sum stemming from waste water pollution and oil industry waste, saying that fraud marked the trial and that Texaco Petroleum Co. mitigated the environmental damage long before 2001, when it became a Chevron subsidiary.
Ecuador’s highest court has upheld the ruling, while the plaintiffs have accused Chevron of dirty tricks designed to subvert the lower-court ruling.
UPDATE 4-Argentine judge embargoes $19 bln Chevron assets
By Guido Nejamkis and Eduardo Garcia
BUENOS AIRES/QUITO, Nov 7 (Reuters) – An Argentine judge has embargoed up to $19 billion in Chevron assets in connection with an environmental lawsuit by Ecuadorean villagers, a lawyer for the plaintiffs said on Wednesday, the latest volley in a two-decade-long legal saga that now spans several countries.
An Ecuadorean court last year ordered Chevron Corp to pay the enormous sum for contamination of watersheds over nearly 30 years that the plaintiffs say sickened indigenous tribespeople and farmers in the Ecuadorean Amazon.
Chevron has refused to make any payments and accuses Ecuadorean courts of fraud. Because the company has few assets in the Andean nation, the plaintiffs are seeking enforcement of the ruling in other countries including Brazil and Canada.
“The freeze order applies to the entire $19 billon amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well,” the plaintiffs said in a statement.
The ruling could pave the way for the plaintiffs to collect on the award. But it could also be just another round of judicial ping-pong in a complex legal battle that has included frequent appeals and vicious accusations.
The plaintiffs’ lawyer, Enrique Bruchou, said the ruling by Argentine judge Adrian Elcuj includes an embargo on 40 percent of Chevron’s Argentine oil revenue, the company’s shares in its Argentine subsidiary and a stake in an oil pipeline.
“We consider this to be an exemplary ruling,” he said. “We are letting the world know that foreign investment is welcome in Latin America, but that investors must adhere to the same environmental standards that apply in their own countries.”
Chevron, Argentina’s fourth-largest oil producer, said it was not aware of any Argentine court order and reiterated its position that the Ecuador ruling is unenforceable.
“The Ecuador judgment is a product of bribery, fraud, and it is illegitimate … We do not believe that the Ecuador judgment is enforceable in any court that observes the rule of law,” the company said in a statement.
Bruchou said the company can appeal, but would have to file for an appeal in Ecuador because the judge issued the embargo after a request by an Ecuadorean court.
The plaintiffs plan to file similar suits in Colombia as well as in as yet unidentified countries in Asia and Europe.
A U.S. appeals court in January said that a U.S. judge did not have the authority to stop courts in other countries from enforcing the judgment. Chevron appealed the decision, but the U.S. supreme court rejected the appeal in October.
LONG LEGAL FIGHT
Filled with intrigue, accusations of corruption, bribery and dirty tricks, the complicated case has been fought for nearly two decades, mainly in courts in Ecuador and the United States.
Chevron filed for arbitration in 2009, accusing Ecuador of violating a treaty with the United States requiring the OPEC-member country to guarantee Chevron a fair trial.
The company has also accused the plaintiffs, their legal team and their advisers of fraud in a U.S. court. The trial is scheduled to begin on Oct. 15, 2013.
The plaintiffs from villages in the oil-rich Amazon won an $18.2 billion case against the oil giant over claims that Texaco, bought by Chevron in 2001, contaminated the area from 1964 to 1992.
Their legal team argues that Texaco’s remediation efforts were insufficient. Their long-term legal adviser, Steven Donziger, has also filed counter claims in a U.S. court accusing Chevron of fraud.
The claimants’ lawyers estimate that Chevron’s assets in Argentina are worth around $2 billion and that they could obtain some $600 million a year if the embargo is enforced.
In September, Chevron signed an accord with state-controlled YPF, Argentina’s No. 1 energy company, to consider a joint exploration project.
Chevron argues that the company has no direct assets in Argentina because its operations in the country are conducted by subsidiaries.
“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,” Chevron said.
Chevron Seeks Lifting of Argentina Court Order: Clerk
Chevron Corp. (CVX) is seeking to suspend an Argentine court order to seize the U.S. oil producer’s assets in the country related to a $19 billion award over pollution in Ecuador, said a court clerk briefed on the case.
Chevron attorneys made the request at Buenos Aires civil court today, said the clerk, who declined to be named citing tribunal policy. Juan Rivera, an Argentine attorney who said he represents Chevron, declined to comment on the filing, referring all questions to corporate spokespeople.
Chevron executives in Buenos Aires weren’t available to comment, a receptionist said by telephone today. James Craig, a spokesman for the San Ramon, California-based company, didn’t immediately return phone or e-mail messages seeking comment.
Civil Judge Adrian Elcuj Miranda ordered 40 percent of Chevron’s bank accounts in Argentina to be held in escrow, Enrique Bruchou, an Argentine attorney at Bruchou, Fernandez, Madero & Lombardi, said on Nov. 7. Bruchou represents the Ecuadorean plaintiffs in the Amazon lawsuit.
The Ecuadorean plaintiffs said Oct. 31 they asked an Argentine court to enforce a $19 billion award against Chevron, filing an attachment order in a Court of Justice in Buenos Aires in line with an international treaty signed by Ecuador, Argentina and Colombia that speeds up attachments. The Ecuadoreans blame Texaco Inc., which Chevron acquired in 2001, for destroying the environment in the Lago Agrio region, damaging living conditions of 30,000 inhabitants. Lago Agrio was named after Sour Lake in Texas.
Chevron will face more attachment requests in Europe, Asia and Oceania, Bruchou said Nov. 7. Another related lawsuit was filed by the Ecuadoreans in the Ontario Superior Court of Justice in Toronto on May 30. Chevron Canada Ltd. will have a hearing on the lawsuit Nov. 28.
The company on Oct. 9 lost a U.S. Supreme Court bid to block the judgment imposed by an Ecuadorean court. The highest U.S. court let stand a federal appeals court ruling against Chevron that the Ecuadoreans can’t be barred from seeking to collect the award anywhere in the world.
Chevron is unaware of either a filing by the plaintiffs or a court order in Argentina, Chevron’s Craig said by e-mail Nov. 7.
Editorial: SELVA-Vida Sin Fronteras
Gustavo López Ospina
Pieter Jan Brouwer
Assistant: Emilia Romero
The Amazon Pink Dolphin’s Voice is associated with the International Environmental Mission, a grass roots citizens movement created by Chilean Senator Juan Pablo Letelier.
SELVA Vida Sin Fronteras acknowledges Kevin Schafer’s important contribution towards protecting the highly endangered Amazon pink fresh water dolphin. Title photographs of our “The Amazon Pink Dolphin’s Voice” were taken by Mr. Schafer.