Ecuadoreans ask court to seize Chevron Canada assets

Fri Nov 30, 2012 4:29am IST

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* Villagers want Ecuador ruling enforced in Canada

* Chevron says Canada court does not have jurisdiction

* Company disputes $19 bln judgment against it

By Julie Gordon

TORONTO, Nov 29 (Reuters) - Lawyers for Chevron Corp asked an Ontario judge on Thursday to toss out a bid by Amazon villagers to seize its Canadian assets to help pay a $19 billion award granted by an Ecuadorean court in decades-old pollution case.

The hearing marks the first time the plaintiffs, 47 Amazon villagers, have sought to persuade a foreign court to collect damages awarded to them for environmental contamination in the South American country dating back to the 1960s. Chevron Canada's assets are worth more than $12 billion, the plaintiffs say.

Chevron, the No. 2 U.S. oil company, has steadfastly refused to pay the award, saying the February 2011 ruling by the Ecuadorean court was influenced by fraud and bribery.

At the hearing in Toronto, lawyers told an Ontario provincial court that the Canadian subsidiary - rather than the California-based parent - owns all of Chevron's assets in Canada. The company also argued that there is no tangible connection between Chevron Canada and the Ecuadorean villagers.

"There is simply no suggestion, let alone evidence, that Chevron Canada ... had anything to do with what did or did not happen in Ecuador," said Clarke Hunter, lawyer for the company.

Lawyers for the plaintiffs were not immediately for comment. They will present their case to the court on Friday.

The action is the latest skirmish in an two-decade conflict between Chevron and residents of Ecuador's Lago Agrio region over claims that Texaco, which Chevron acquired in 2001, contaminated the area from 1964 to 1992.

The dispute has spawned litigation in numerous courts both inside and outside the United States. The oil industry is watching the case closely because the outcome may affect other cases accusing companies of polluting the areas where they operate.

JUDGE'S QUESTION

Early in the proceedings on Thursday, the Ontario Superior Court judge hearing the case questioned whether he should even be considering the issue, as the Ecuadorean decision is now the subject of an appeal in the Andean nation's constitutional court.

"Is there a final order from the Ecuadorean courts that this court can consider," Justice David Brown asked Chevron's attorney. "We don't look at stuff unless there is a final order."

In October, Chevron lost a U.S. Supreme Court bid to block the Ecuadorean judgment.

The Supreme Court of Canada has ruled the country's courts can recognize and enforce foreign judgments in cases where there is a "reasonable and substantial connection" between the cause of the action and the foreign court.

The plaintiffs are seeking remedies in Brazil and Argentina in addition to Canada.

Chevron Canada's assets include interests in offshore oil projects in the North Atlantic, including Hibernia and Hebron, a 20 percent interest in the Shell-operated Athabasca Oil Sands Project. The company also has a lubricants business in Ontario.

Shares of Chevron rose 0.2 percent to $105.79 on Thursday in trading on the New York Stock Exchange.

Proceedings in the case - Chevron v Ecuador CV-12-454778 - are expected to wrap up on Friday.

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