By Braden Reddall and Eduardo Garcia
SAN FRANCISCO/QUITO (Reuters) - Chevron Corp
An Ecuadorian judge ordered the U.S. major to pay the damages after a fraught legal battle that has lasted nearly two decades and looks like it will run even longer.
The California oil company inherited the case when it bought Texaco a decade ago. Its appeal on Friday argued that the lower courts violated Ecuador's constitution by refusing to take corrective action in response to what Chevron calls "extensive fraud and corruption" committed by the plaintiffs' lawyers and representatives.
Chevron said the original judgment, delivered last February by an Ecuadorian court in the jungle city of Lago Agrio, was based on faulty evidence and retroactive application of a law, while ignoring releases of liability granted to Texaco by Ecuador in the 1990s.
"Today's appeal gives (the Supreme Court) an opportunity to correct the grave injustices that have occurred in this case," Hewitt Pate, Chevron's general counsel, said in a statement.
The case is being watched closely by the oil industry for precedents that could influence other claims against companies accused of pollution in the countries where they operate.
Plaintiffs have responded to the accusations by citing Chevron's own test data in documenting the pollution and arguing that Ecuador's release for Texaco did not prevent third parties from suing for damages.
In related litigation in New York, the plaintiffs also accuse the company of mishandling soil and water samples during the Lago Agrio trial by maintaining two different laboratories, based on testimony from a Chevron expert.
Along with the appeal in Ecuador, Chevron asked that it not be required to post a bond to prevent enforcement of the judgment during the appeal process, arguing that such a payment would violate Ecuador's obligations under an order issued last February by an international arbitration tribunal.
Pablo Fajardo, a lawyer for the plaintiffs, said the next step would be to see whether the Lago Agrio appeals court requires Chevron to pay.
"If it asks (Chevron) to pay a bond, and if it pays the bond, then only the bond can stop us from carrying out the sentence," Fajardo told Reuters.
Asked if the plaintiffs were looking at any country in particular where it could seek to collect the damages, he said they would first await the decision on the bond. "We haven't done anything, we don't have any plans yet," Fajardo said.
Chevron no longer has assets in Ecuador, so questions surround the enforcement of the original ruling. A lawyer for the company accused the plaintiffs last May of planning to seek enforcement in countries hostile to Chevron.
The entire case may be reheard far from both Ecuador and the United States. The arbitration tribunal in The Hague, operating under a U.S.-Ecuador treaty, ordered Ecuador to take all measures at its disposal to suspend enforcement of the Lago Agrio judgment until the arbitrators have their say.
The tribunal is expected to rule any day on the question of whether or not it has jurisdiction in the case.
(Reporting by Braden Reddall in San Francisco, Swetha Gopinath in Bangalore and Eduardo Garcia in Quito; editing by Andre Grenon, Gary Hill)