Lago Agrio: New Ecuadoran Decision

Here, courtesy of the Lago Agrio plaintiffs’ PR people, is a copy of a new decision by the Provincial Court of Justice in Sucumbios, the Ecuadoran court at the center of the Lago Agrio case. Unfortunately, no translation is yet available as far as I know, so I can’t really comment on the merits. The decision seems to make a big point about how Chevron characterized its relationship with its subsidiaries in its 10Ks and, in general, about the reasons why Chevron (the parent company) is liable under Ecuadoran law. Here is the plaintiffs’ characterization of the decision in a press release dated yesterday:

An Ecuador court this week issued an order for the plaintiffs to obtain approximately $200 million in Chevron assets in the South American country …

Among the assets ordered turned over are a $96.3 million debt Ecuador’s government owes Chevron, monies in various bank accounts held in Ecuador by Chevron and its subsidiaries, and licensing fees generated by the use of Chevron trademarks in the country. The total amount in assets could generate an estimated $200 million for the plaintiffs, who won their case in 2011 after an eight-year trial, said lawyers for the communities.

The $96.3 million figure is the most interesting item in the release. As I noted in August, it seems that the plaintiffs are arguing that Ecuador ought to pay the $96 million that Chevron won in one of its BIT arbitrations against Ecuador to them rather than to Chevron. This is strangely like Chevron’s attempt, in New York, to mount a kind of collateral attack on the Lago Agrio judgment by seeking to attach it to secure Chevron’s RICO and fraud claims. I am not at all sure how this will play out.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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