Lago Agrio: Update on the Brazilian Enforcement Proceeding

I reported way back in 2012 that the Lago Agrio plaintiffs had sought recognition and enforcement of the Lago Agrio judgment in Brazil. There has been a development—maybe a minor one, though a Brazilian lawyer would know better than I.

The Brazilian Federal Prosecution Service has recommended to the Brazilian court that recognition be denied. The recommendation relies heavily on Judge Kaplan’s findings of fraud. While the prosecutor reasoned that the US decision was not binding, because it had not been recognized in Brazil, it was competent evidence of its findings of fact. The Brazilian concept of public order did not allow recognition of a judgment obtained by fraud.

We’ve been speculating for a while that the real goal of Chevron’s RICO case was to obtain findings that Chevron could use in other courts where the Ecuadorans are seeking recognition of the judgment. That seems to have happened here, and it may be a bad omen for the LAPs in Canada and elsewhere.

I hope that our Brazilian law experts at Cartas Blogatorias will comment on the prosecutor’s recommendation. Meanwhile, I solicited comments from the parties. Here is Chevron’s:

Brazil’s Deputy Prosecutor General’s recommendation that the fraudulent Ecuadorian judgment against Chevron not be recognized for enforcement upholds international and Brazilian law. This recommendation is consistent with the U.S. federal court ruling that found the Ecuadorian judgment to be the product of fraud, bribery and extortion, and not enforceable in the United States. We are confident that other jurisdictions that observe the rule of law will similarly find the Ecuadorian judgment to be illegitimate and unenforceable.

I asked Steven Donziger and Karen Hinton for a comment but didn’t hear back before publication.

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