Argentine Supreme Court Rejects Fraudulent Ecuadorian Judgment Against Chevron
July 31 2020 - 2:42AM
Business Wire
Argentina’s highest court unanimously rejected the plaintiffs’
final bid to enforce a fraudulent $9.5 billion Ecuadorian judgment
against Chevron Corporation. This is the latest in a string of
legal victories in Chevron’s global defense against the Ecuadorian
judgment—found by U.S. courts to be the product of fraud, bribery,
and corruption, and held unenforceable as a matter of international
law by an international arbitral tribunal in The Hague.
On July 30, in a unanimous 5-0 decision, the Supreme Court of
Argentina dismissed the plaintiffs’ appeal from the decision by the
Court of Appeals in Buenos Aires of July 3, 2018, which affirmed
the trial court’s opinion and dismissed the Ecuadorian plaintiffs’
action for lack of jurisdiction. Argentina’s courts have now
uniformly and definitively rejected the plaintiffs’ attempt to
recognize and enforce the Ecuadorian judgment in that nation.
With the decision of the Supreme Court of Argentina, the last
pending proceeding seeking the recognition of the corrupt
Ecuadorian judgment has come to an end. Decisions by courts and
tribunals in the United States, Brazil, Canada, Gibraltar, The
Hague, and now Argentina, confirm that the fraudulent Ecuadorian
judgment should be unenforceable in any court that respects the
rule of law. Even the Republic of Ecuador, a longstanding supporter
of the litigation against Chevron, finally admitted in a public
filing earlier this month that the $9.5 billion judgment issued by
its courts against Chevron is “fraudulent.”
Chevron has defeated all actions to date seeking the recognition
and enforcement of that judgment. In July 2019, after the Canadian
Supreme Court declined to review a lower court opinion dismissing
the action against Chevron’s indirect subsidiary in Canada, the
plaintiffs dismissed their Canadian recognition proceeding. In
November 2017, Brazil’s highest court dismissed a recognition
action brought in that country. Prosecutors in both Brazil and
Argentina had previously opined that the Ecuadorian judgment was
unenforceable because it was the product of fraud and
corruption.
The key remaining proceeding in connection with the corrupt
Ecuadorian judgment is Chevron’s arbitration against the Republic
of Ecuador before an international tribunal in The Hague. The
tribunal ruled for Chevron on liability in 2018 and the arbitration
is now in the damages phase, where Chevron is seeking to recover
from the Republic of Ecuador costs Chevron has incurred to expose
and defend against the fraud perpetrated against it.
In a unanimous 2018 decision, the international tribunal in The
Hague—including the arbitrator chosen by Ecuador—held that the $9.5
billion judgment rendered against Chevron in Ecuador in 2011 was
procured through fraud, including judicial bribery, blackmail, and
extortion, culminating in the presiding judge allowing the
plaintiffs’ team to ghostwrite the judgment itself in exchange for
the promise of a bribe. Finding the evidence propounded by Chevron
to be “overwhelming,” the tribunal held that “[s]hort of a signed
confession by the miscreants . . . the evidence establishing
‘ghostwriting’ in this arbitration ‘must be the most thorough
documentary, video, and testimonial proof of fraud ever put before
an arbitral tribunal.’”
The international tribunal further held that Chevron was
released by the Republic of Ecuador from the same environmental
claims on which the fraudulent Ecuadorian judgment is exclusively
based, following completion of a $40-million environmental
remediation program approved by the Ecuadorian government. The
international tribunal found that the Ecuadorian judgment violated
international law and should not be enforced anywhere in the
world.
The tribunal’s findings in The Hague are consistent with
findings of U.S. courts. In 2014, the U.S. District Court for the
Southern District of New York found that Steven Donziger and his
team procured the Ecuadorian judgment against Chevron through fraud
and racketeering, including extortion, money laundering, wire
fraud, witness tampering, judicial bribery, Foreign Corrupt
Practices Act violations, and obstruction of justice. The court
prohibited enforcement of the Ecuadorian judgment in the United
States and ordered the Ecuadorian plaintiffs and their lawyers to
pay back to Chevron any enforcement proceeds they obtain anywhere
in the world. The U.S. court judgment is now final after having
been unanimously affirmed by the Court of Appeals and denied review
by the Supreme Court. In 2018, Donziger was suspended from the
practice of law for his misconduct in the Ecuador litigation. In
May 2019, Donziger was held in civil contempt of court for his
breach of the RICO judgment, which prevented him from profiting
from the fraud, by selling interests in the Ecuadorian judgment to
investors and using a large portion of the proceeds on personal
expenses. In July 2019, Donziger was charged with criminal contempt
due to his ongoing refusal to comply with court orders. Chevron is
not a party to the criminal contempt proceedings.
Donziger is not the only Ecuadorian plaintiffs’ attorney
implicated in what the Wall Street Journal has called the “legal
fraud of the century.” Ecuadorian counsel Pablo Fajardo was
condemned alongside Donziger by both U.S. courts and the arbitral
tribunal in The Hague, which concluded that both “engaged in
prolonged, malign conduct towards [Ecuador’s] legal system
generally and, particularly, the Lago Agrio Court in a manner that
almost beggars belief in its arrogant contempt for elemental
principles of truth and justice.” In May 2018, the Supreme Court of
Gibraltar issued a judgment against Fajardo and other participants
in the fraud for their role in attempting to enforce the Ecuadorian
judgment, awarding $38 million in damages to Chevron.
Chevron Corporation is one of the world's leading integrated
energy companies. Through its subsidiaries that conduct business
worldwide, the company is involved in virtually every facet of the
energy industry. Chevron explores for, produces and transports
crude oil and natural gas; refines, markets and distributes
transportation fuels and lubricants; manufactures and sells
petrochemicals and additives; generates power; and develops and
deploys technologies that enhance business value in every aspect of
the company's operations. Chevron is based in San Ramon,
California. More information about Chevron is available at
www.chevron.com.
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Sean Comey, +1-925-842-5509
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