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Brazil follows Argentina in rejecting Ecuadorian Chevron judgment

Por: Latin LawyerImprimirVisualizar em PDF

Brazil's Superior Court of Justice (STJ) and Argentina's Supreme Court have both refused to enforce a now-infamous US$9 billion judgment against Chevron for pollution caused by crude oil production in the Amazon region, with both countries citing lack of jurisdiction.

Pinheiro Neto Advogados and Mattos Engelberg Advogados in São Paulo, and Advocacia Velloso in Brasília advised Chevron for the Brazilian proceedings, while Jones Day in Los Angeles and Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) represented the oil major in Argentina.

The Ecuadorian plaintiffs – a group of indigenous residents of Ecuador's Amazon region – are thought to have been represented by Sergio Bermudes Advogados in Rio de Janeiro, but this was not confirmed prior to publishing.

On 29 November, Brazil's highest court in non-constitutional matters rejected the plaintiffs' attempt to have an Ecuadorian judgment that was granted in 2011, and which held Chevron liable for environmental damages incurred by the Amazonian Oriente region of Ecuador, enforced in Brazil.

Argentina's Supreme Court had rejected the judgment on the same grounds of lack of jurisdiction on 31 October.

The STJ decreed that Chevron is a foreign defendant with no assets in Brazil. Although Chevron indirectly owns a local subsidiary in Brazil, the STJ said that, because this subsidiary is a separate and distinct legal entity, the Ecuadorean judgment could not be enforced upon it.

Further salt was rubbed into the wounds of the Ecuadorian plaintiffs as the STJ also ruled that they would have to pay Chevron's legal fees, and that the Ecuadorians were not entitled to the free legal aid benefit they were hoping to receive.

The Ecuadorian plaintiffs are fighting a case that has spanned over 20 years, accusing Chevron of environmental damage in the Amazonian Oriente region. They first filed a class action case in 1993 against Chevron, and finally obtained an Ecuadorian judgment in 2011 for US$9.5 billion against Chevron. Chevron does not own any assets or subsidiaries in Ecuador and the company refuses to acknowledge the judgment.

Influencing both Brazilian and Argentine courts' decisions to reject the Ecuadorian judgment is the fraud and racketeering activity discovered on the Ecuadorian prosecution's side. In 2014 a US federal court found that New York-based human rights lawyer and lead representative of the Ecuadorian plaintiffs, Steven Donziger, violated the federal Racketeer Influenced and Corrupt Organisations Act (RICO), committing extortion, money-laundering, wire fraud and tampering with witness statements while obtaining the Ecuadorian judgment. The US Court of Appeals unanimously supported the lower court's decision in 2016. In June this year, the US Supreme Court denied Donzinger's request for a review of the case.

Chevron filed a lawsuit against the Ecuadorian plaintiffs as a result of the findings of racketeering and corruption.

The Ecuadorian judgment has now been rejected in Argentina, Brazil, the United States and Canada. It is thought that the Ecuadorian plaintiffs will continue to seek approval from jurisdictions in countries such as Mexico and Suriname where Chevron owns assets, as their attempts in Argentina and Brazil have demonstrated.

 

Counsel to Chevron

In-house counsel - Andres Romero and Jose Luis Martin

Jones Day

Partner David DiMeglio and associates Kendra Marvel and Alexandria Ordway in Los Angeles

 

Pinheiro Neto Advogados

Partners Celso Cintra Mori, João Medeiros, Leonardo Rocha e Silva and Bianca Pumar, and associate Rafael Goldstein in São Paulo

 

Mattos Engelberg Advogados

Partner Ubiratan Mattos and associates Ana Carolina Gazoni, Lucas Bianchini and Eduardo Doria Nehme in São Paulo

 

Advocacia Velloso

Partners Carlos Velloso, Erico Carvalho and Renata Carpaneda in Brasília

Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (Jr)

Partners José Martínez de Hoz and Pablo Rueda, and associates Brian Burstein and Germán Landau in Buenos Aires

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