LITIGATION:

Chevron fined $8.6B in Ecuador pollution case

Story updated 5:45 p.m. EST.

A court in Ecuador ruled today that Chevron Corp. should pay at least $8.6 billion in damages for crude oil pollution in a long-running and closely fought case, according to the plaintiffs.

Chevron acknowledged the "adverse ruling" but said it was not clear how much the judge had awarded in damages.

The Ecuadorean plaintiffs, who first filed suit in 1993, were seeking up to $113 billion for alleged pollution in the Lago Agrio area of the Amazon jungle.

Chevron, which took on the litigation when it acquired Texaco Petroleum Co. in 2001, has claimed that the allegations are part of an extortion scheme.

Pablo Fajardo, the lead Ecuadorean plaintiffs' attorney in the case, said in a statement that the ruling "affirms what the plaintiffs have contended for the past 18 years about Chevron's intentional and unlawful contamination of Ecuador's rainforest."

Chevron has vowed to contest the judgment both in Ecuador and internationally.

As part of a concentrated effort to undermine the plaintiffs, the company filed a federal racketeering suit against the plaintiffs' legal team and other supporters earlier this month (Greenwire, Feb. 2).

A federal judge in the Southern District of New York subsequently issued a temporary restraining order that bars the plaintiffs from immediately seeking to enforce a favorable judgment outside of Ecuador (Greenwire, Feb. 9).

The plaintiffs are expected to look outside Ecuador for damages because Chevron does not have assets there.

Chevron spokesman Kent Robertson said the ruling, which he described as "illegitimate and unenforceable," was expected.

"We will appeal this verdict in Ecuador and we intend to see that the perpetrators of this fraud are held accountable for their misconduct," he said.

Further bolstering Chevron's position, an international arbitration panel issued an order last week asking Ecuador not to allow the court to immediately enforce a judgment (E&ENews PM, Feb. 11)

Ecuador said in a statement late last week that, under Ecuadorean law, the ruling could not be enforced while an appeal was pending.

The arbitration between Chevron and Ecuador has been ongoing since 2009 after the oil company alleged the country had violated bilateral trade agreements with the United States.

Texaco was part of an oil consortium that worked alongside the Ecuadorean government-controlled company, Petroecuador.