Lago Agrio: Chevron’s Answer In Canada

Chevron has filed its statement of defense (like an answer) in the Yaiguaje case, now that it has been remanded to the trial court.

The statement has a concise summary of Chevron’s arguments:

  1. The Ecuador court did not have jurisdiction over Chevron Corp.;
  2. The Ecuador Judgment is based upon a law applied in a manner which retroactively created a cause of action against Chevron Corp. for which the Republic of Ecuador had previously issued a binding release;
  3. Chevron Corp. was denied Canadian standards of fairness and natural justice throughout the Ecuador proceedings;
  4. As found by the United States District Court for the Southern District of New York (“SDNY”), the Ecuador Judgment was obtained by fraudulent means and rendered by a systemically corrupt and biased court; and
  5. Any recognition and enforcement of the Ecuador Judgment would constitute a violation of the obligations of the Republic of Ecuador (“the ROE”) under international law

all of which offends Canadian standards of natural justice and public policy for the recognition and enforcement of foreign judgments.

My only comment on the list is that I find it hard to think the Canadian court will give much heed to the claim that the Ecuadoran court lacked jurisdiction, for reasons I’ve mentioned here several times.

The most interesting paragraphs in the whole answer, I think, are paragraphs 86 and 87, which assert that the LAPs are collaterally estopped to relitigate the issues of fraud and corruption. I welcome the thoughts of Canadian lawyers on how a Canadian court is likely to approach this. Chevron was careful to note that all of the plaintiffs or their privies litigated the issues in New York. What will the court make of the fact that most of the LAPs were not active litigants?

Paragraph 89 is also interesting, because Chevron makes the claim that angered Judge Wesley in the Second Circuit, namely, that it is not bound by the representations Texaco made to the court in the forum non conveniens proceedings.

I’ll try to keep you posted on developments from a distance.

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 2d ed. 2016), 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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