Lago Agrio: Update and Correction
Posted on July 11, 2019
A correction to my last post on the Lago Agrio case. An alert reader noted that there is still an enforcement proceeding pending in Argentina’s Supreme Court. In late 2017, I reported on the first-instance decision in Argentina, and although I didn’t cover it, in July 2018 Chevron published an English translation of the appellate decision affirming the lower court’s decision. I cannot find a reference online to the proceeding in the Argentine Supreme Court, but assuming the reader’s account is correct, then it is not right to say that the Lago Agrio case is wholly over. Hope springs eternal in the human breast.
A few more observations about the latest development in Canada:
- Pablo Fajardo, the lawyer for the Ecuadoran plaintiffs, tweeted:
Como @udapt_oficial que llevamos éste proceso, decidimos desistir del caso en Canadá porque no tiene sentido seguir un juicio en contra de una empresa que es una cáscara vacía. Esa es la real corrupción de #Chevron. Se oculta tras la subsidiaria para evadir la justicia. 4/4
— Pablo Fajardo M. (@Pablofame) July 9, 2019
This is a little more fulsome than Steven Donziger’s tweet, which cited “procedural reasons” for the consent to dismissal:
To be clear: (1) the $12b pollution judgment against @Chevron as confirmed by 4 courts in Ecuador is still valid; (2) the Ecuadorians wanted the enforcement action terminated in Ontario for procedural reasons, which has now happened;
— Steven Donziger (@SDonziger) July 9, 2019
But Fajardo’s explanation is, I confess, a little disappointing, because I thought the whole purpose of continuing to proceed in Canada was to get a Canadian judgment that could then be recognized elsewhere: a real-world example of judgment arbitrage.
- I asked the Ecuadorans’ representatives whether there was a deal regarding the costs that the Lago Agrio plaintiffs would have to pay after the court assessed them and was told that there was not. With that in mind, it seems to me the motive for agreeing to dismissal of the case was to avoid the possibility of issue preclusion in a third country if they lost in Canada.
- In light of Donziger’s note that the the Canadian dismissal was without prejudice and that the LAPs would seek to bring claims in other countries, I expect that Chevron will continue to prosecute its investment treaty arbitration against Ecuador, which is aimed at depriving the Ecuadoran judgment of effect under Ecuadoran law. If that effort is successful, then Chevron will have chopped off all of the hydra’s heads at once. Otherwise , in principle the LAPs can continue to bring enforcement actions in country after country.