By way of update on a case we have previously written about (in July 2013, January 2014, and December 2014), on March 12, 2015, the International Court of Justice (the “ICJ”) upheld the controversial USD $9.5 billion Ecuadorian judgment against Chevron Corporation for harm caused to 30,000 Ecuadorian residents by environmental pollution from 1972 to 1990 (the “Ecuadorian Judgment”).
The recent ICJ ruling is the result of Chevron’s appeal of the Ecuadorian Judgment. Chevron argued Ecuador violated a bilateral investment treaty signed with the United States and a 1995 settlement agreement reached with the Ecuadorean government prevented the Ecuadorian plaintiffs from advancing their class action lawsuit. However, the ICJ stated that because the case involved the individual rights of the Ecuadorian plaintiffs, the 1995 settlement agreement – executed between the then government of Ecuador and oil company Texaco, which Chevron acquired in 2001 – did not bind the plaintiffs.
The Supreme Court of Canada recently heard arguments on an appeal related to the enforcement of the Ecuadorian Judgment in Canada. The decision, which has not been released, is expected to provide guidance on foreign plaintiffs’ ability to enforce foreign judgments against the assets of Canadian subsidiaries. While the ICJ ruling may not directly affect the decision of the Supreme Court of Canada, it serves to buttress the Ecuadorian Judgment underlying the enforcement proceedings in Ontario (although the same judgment was found by a New York court to have been fraudulently obtained).