By Sheila McNulty in Houston
A US appeals court has thrown out an order blocking the enforcement of a multibillion dollar ruling against Chevron outside of Ecuador, cancelling out a previous victory for the company in its long-running legal battle over environmental damage in the Amazon.
In February, an Ecuadorean court issued the award against Chevron following allegations of oil pollution in the Amazon by Texaco, which Chevron took over in 2001. Chevron has not paid the damages as it is appealing the verdict.
A US federal judge issued a preliminary order in March barring the Ecuadorean plaintiffs in the lawsuit from attaching Chevron?s assets outside Ecuador, and international arbitrators at The Hague also ordered the temporary suspension of any judgment against Chevron.
Chevron no longer has assets in Ecuador.
On Monday, the Second US Circuit Court of Appeals lifted the injunction preventing enforcement of the Ecuador court?s ruling against Chevron overseas, saying it would issue an opinion ?in due course?.
Jim Tyrrell, the attorney who argued for the Ecuadoreans before the Second Circuit, said, ?We are very excited that the court has reached this decision. It represents a triumph of the rule of law over the sensationalism created by Chevron?s PR department.?
The Ecuador case was born out of the alliance between Texaco and state oil company Petroecuador which opened up exploration on the Ecuadorean-Colombian border in the late 1960s.
Texaco left Ecuador in 1992 and Chevron has argued that it fulfilled its responsibilities when the company cleaned up 37.5 per cent of wells as part of a $40m remediation agreement with the Ecuadorean government in 1995. Petroecuador has continued to operate in the area.
Chevron has accused leading lawyers and other figures in the plaintiffs? case of conducting a ?corporate shakedown? and has brought racketeering charges in the US.
After Monday?s ruling, Chevron said, ?There is no legitimate evidence supporting any finding of liability against Chevron because Texaco Petroleum Co cleaned up its share of environmental impacts in Ecuador and the remaining impacts are the responsibility of the government of Ecuador and its state-owned oil company, Petroecuador.??
It said that the new judicial order would have no effect on the February 9 2011 order in the Permanent Court of Arbitration in The Hague: ?The treaty arbitration tribunal?s order continues to require Ecuador to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against Chevron in the Lago Agrio case pending further order of the Tribunal.??
? The Financial Times Limited 2011