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Appeals Court: Indigenous Groups Should Not Have to Pay Legal Fees of Huge American Oil Company

TORONTO, Oct. 31 /CSRwire/ – Oil major Chevron suffered a legal setback today in the Ecuador pollution case when a three-judge appellate panel in Canada denied the company’s attempt to force impoverished indigenous and farmer communities to pay the company’s exorbitant legal fees in a clear attempt to kill off the historic litigation before it could be resolved on the merits.

The decision, by the Court of Appeal for Ontario, allows the indigenous groups to continue with their five-year effort to try to seize Chevron assets in Canada to pay for an environmental remediation of their ancestral lands based on a $9.5 billion judgment won in Ecuador’s courts in 2011. Chevron had insisted the underlying trial take place in Ecuador and had accepted jurisdiction there, but when it lost the case it refused to pay the judgment.

In quickly vacating a September order from a motions judge to grant a Chevron request to impose roughly $1 million in costs on the indigenous and farmer groups to pay the company’s legal fees, the three-judge panel issued a ruling that said “it is difficult to accept that the motion for security for costs was anything more than a measure [by Chevron] intended to bring an end to the litigation.”

Canadian rules, the panel wrote, require the judge “to take a step back and consider the justness of the order sought in all the circumstances of the case.” The panel found that the judge, however, “failed to undertake this part of that analysis.”

“The appellants [Ecuadorian indigenous groups] are seeking to enforce a judgment in which they have no direct economic interest. Funds collected on that judgment will be paid into a trust and net funds are to be used for environmental rehabilitation or health care purposes. This is public interest litigation.”

“The failure to consider all the circumstances of the case and conduct a holistic analysis of the critical overarching principle on the motion before her constitutes an error in principle,” the panel added.

Chevron had sought the costs order to block the enforcement action after company officials promised the rainforest communities a “lifetime of litigation” if they persisted in pursuing their case, according to Patricio Salazar, the lead Ecuadorian lawyer for the plaintiffs. “This decision is a huge step forward for the indigenous groups of Ecuador,” Salazar said. “Twenty-four years obviously is too long for any litigation, but especially one involving the potential extinction of indigenous groups as a result of environmental pollution.

“Chevron’s entire strategy is based on obstruction and delay,” Salazar added. “Canadian courts need to put an end to this abuse of the civil justice system. It is unfortunate that this Chevron maneuver to impose a form of court tax on the people it poisoned got as far as it did.”

The Ecuador judgment against Chevron was based on 105 technical evidentiary reports and affirmed unanimously by two appellate courts in Ecuador, including by the country’s highest court in 2013. Because Chevron refused to pay and sold off its assets in the country, the indigenous groups are trying to enforce their judgment against company assets in Canada.

Canada’s Supreme Court already ruled against Chevron in 2015 when the company tried to block the enforcement action on different grounds, claiming at the time that Canada’s courts had no jurisdiction over the claims. The Supreme Court denied Chevron’s motion unanimously.

Following that setback, Chevron tried to impose the costs order as a different tactic to block the case. The company also has tried to prevent its wholly-owned Canadian subsidiary from being sued in Canada, […]

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