Canadian judge hears $19B Ecuador lawsuit case

[November 30, 2012]  TORONTO (AP) -- An attempt by Ecuadorian villagers to have a Canadian court enforce a $19 billion judgment awarded in their country against multinational oil giant Chevron Corp. faced a judge's skepticism Thursday.

Ontario Superior Court Justice David Brown heard arguments on Chevron's motions to challenge jurisdiction but wondered whether he could issue a ruling since an appeal is pending in Ecuador's constitutional court. He also said the case should be heard in the U.S., not Canada.

The award to the villagers was made in Ecuador for black sludge contamination of a rainforest between 1972 and 1990 by Texaco, which Chevron Corp. bought in 2001. U.S.-based Chevron Corp. maintains it won't pay because it says Texaco dealt with the problem before it was bought.

The villagers want the judgment enforced in Canada, arguing that Chevron Canada has billions of dollars' worth of assets.

After filing suit in Canada in May, the villagers launched similar legal actions in Argentina and Brazil. Earlier this month, a judge in Argentina froze Chevron's assets there until the $19 billion is collected.

Foreign judgments are enforceable in Canada as long as there is a "real and substantive connection" between the foreign jurisdiction and the subject matter of the claim, the Supreme Court of Canada has ruled.

However, Chevron Corp. lawyer Alan Mark argued Thursday that the case had no cause against subsidiary Chevron Canada since the judgment was against the parent company, whose subsidiaries largely operate independently.

Fellow Chevron lawyer Clarke Hunter argued that the Canadian units operate with an independent board separated from the U.S.-based parent by several levels of ownership and that none of the boards or management related to the case is in Canada.

"There is no other connection to Ontario but for the claim that the assets of Chevron Canada Ltd. are the assets of Chevron Corp," Mark said.

The hearing resumes Friday.

[Associated Press; By CHARMAINE NORONHA]

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