US Supreme Court leaves Chevron to $19bn Ecuador claim

The US Supreme Court has declined to block an Ecuadorian court’s judgement that oil company Chevron pay $19bn (£11.8bn, €14.5bn) in damages for polluting the oil-rich Amazonian rainforest.

In the latest twist of this long legal battle, the Supreme Court threw out an injunction to pre-emptively block enforcement, without even providing an explanation.

The case relates to claims that Texaco, which Chevron bought in 2001, caused contamination and illness by dumping billions of gallons of waste from rainforest oil drilling sites in local rivers. The first judgment was for $9.5bn, but that was doubled after Chevron refused to apologise.

This claim was upheld by an Ecuadorian appeals court in February (EP, February 2012, p1) and increased further to $19bn in July. Chevron claims the Ecuadorian court judgements were procured through a “fraudulent and corrupt” process, and that the claims were unenforceable.

In March 2011, a New York court issued the blocking injunction, but that was overturned in January this year by an appeals court, which said Chevron had challenged the judgement prematurely.

With Chevron’s legal avenues closing, the Ecuadorian plaintiffs last month began the first steps towards collecting the debt, by successfully obtaining a court order to seize $200m of Chevron assets.

Meanwhile, Chevron is also challenging the judgement under an international trade agreement between the US and Ecuador, with hearings on that front due to begin this month.