Lago Agrio: Argentine Court Freezes Chevron Assets
Posted on November 8, 2012
According to the Lago Agrio plaintiffs, a judge of the Commercial Court of Justice in Buenos Aires has issued an order freezing most of Chevron’s assets in Argentina pending the outcome of the action for recognition and enforcement of the Ecuadoran judgment. Again according to the plaintiffs, these assets include a stake in a pipeline company, bank deposits, and other assets. I have not seen the order yet, nor any response from Chevron.
The plaintiffs’ press release makes at least one of the reasons for the plaintiffs’ choice of Argentina clear: both Argentina and Ecuador are parties to the Inter-American Convention on Execution of Preventive Measures. The United States is not a party, so I have never covered the Convention here. Its operative article, Article 2, provides:
The judges or courts of the States Parties to this Convention shall execute the preventive measures that are decreed by a judge or court of another State Party competent in the international sphere, and whose purpose is:
* * *
b. To execute measures necessary to guarantee the security of property, such as the preventive attachment of immovable and movable property, the registration of the suit or the administration and seizure of businesses.
It seems that the defendant has a right to object to an attachment, but the objection is to be heard by the court where the main proceedings are pending, i.e., Ecuador (see Article 5). It seems, based on the language of Article 2, that a judge in Ecuador must have requested Argentina to attach Chevron’s property. But Argentina’s execution of the request for an attachment does not, under Article 6, require Argentina ultimately to recognize or enforce the Ecuadoran judgment. It’s not really clear to me what happens if Argentina ultimately refuses to recognize or enforce the judgment—is it nevertheless still obligated to keep the attachment in effect?
This is the closest the plaintiffs have come so far to obtaining relief, I think, and it is a significant development.