Lawyer Suggests Ontario Judge Resolve Dispute in US$9.5B Chevron Case with mini-trial

TORONTO — The lawyer for plaintiffs seeking to enforce a US$9.5 billion trial judgment from Ecuador against Chevron Corp.’s assets in Canada has an idea for the Ontario judge who will soon have to decide the matter.

The first choice of the 30,000 people from the Amazon jungle who want to collect on that multi-billion-dollar judgment would be for an Ontario judge to greenlight their enforcement efforts immediately. On the other side, the first choice for Chevron Canada would be for the Canadian enforcement case to be dismissed as soon as possible.

Both sides are in a Toronto court this week asking for those things. Chevron Canada wants a judge to issue a “summary judgment” that would toss the enforcement case out before it moves on to the trial phase. The plaintiffs want the judge to grant a snap summary judgment that would allow them to start seizing Chevon’s Canadian assets without the need for a trial on whether the foreign case is suitable for enforcement in Canada.   

But Alan Lenczner, lawyer for the Ecuadorian plaintiffs, on Wednesday told Glenn Hainey of the Ontario Superior Court of Justice there may be another option: Send the case to a sort-of “mini-trial” that would test some of the controversial facts in the matter.

In particular, he suggested the judge order a compressed trial on the contentious issue of whether the Ecuadorian judgment was fraudulently obtained. A U.S. federal judge and appellate court have found the Ecuadorian judge who issued the 2011 trial ruling was offered a bribe, and that his resulting opinion was “ghost written” by the plaintiff’s legal team.

Under Canadian case law, a defendant can defeat an attempt to enforce a foreign judgment in Canada by establishing that the court ruling was obtained by fraud. While the plaintiffs argue that a Canadian judge is not bound to follow U.S. court rulings, they add they can prove that Chevron’s allegations of judicial fraud don’t meet the criteria that is required for the fraud defence to work.

“Let’s have a trial on the bribe. It’s a nice, eight-day trial. That, I would say, is a reasonable compromise,” Lenczner said. Such a trial could expanded to consider the ghost-writing allegation, he added. “If you want to have that trial, fine. That’s another couple of days.”

Justice Hainey chuckled at the suggestion, saying from the bench that the only way to compress such a trial to a “couple of days” would be for those to be “24-hour” days. “I’m not laughing at your submission, just your estimate of time,” he said.

The plaintiffs obtained the multi-billion dollar judgment in 2011 against U.S.-based Chevron Corp. after an eight-year trial in Ecuador. Since then, they’ve traveled to Argentina, Brazil, the United States and Canada in hopes of enforcing the judgment against Chevron’s holdings in those countries.

Lenczner’s suggestion of a narrow trial was framed as a compromise, because his first request is that the judge rule that Chevron actually has no viable defences to the enforcement action, and grant an order allowing enforcement to being immediately. Chevron’s legal arguments are only prolonging the matter, he said. “They want to re-litigate the whole thing, right from soup to nuts,” he said. “They are liable. The indigenous people didn’t cause the pollution.”

Lenczner argued in court that the fraud defence really shouldn’t be available to Chevron, because Canadian law makes it available only if the allegations of fraud were not aired in the original foreign proceeding. Chevron was able to raise its concerns during the original action, he argued.

Canadian law also says defendants to an enforcement action can argue that they were denied fairness in the original foreign trial, and that the resulting judgment offends Canadian values. Lenczner argued that Chevron got a fair shake in Ecuador because it was able to call all of its witnesses, file several motions, and argue the matter before three levels of the Ecuadorian court system. And he argued as a pollution remediation matter, the case is in line with what plaintiffs might ask of a Canadian court.

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