Chevron asks court to block US$9.5b Ecuadorean award

A Chevron Corp lawyer said last Friday that the company will not apolo-gise for damage that an oil company it purchased is accused of causing to Ecuador's rainforest, even though the refusal means a US$9.5 billion judgement against it will nearly double within days.

Attorney Randy Mastro instead attacked the judgment issued Monday by an Ecuadorean judge as the product of a corrupt judicial system, and urged a US judge to block lawyers for Ecuadoreans from trying to collect the money by getting other countries to seize Chevron assets and bank accounts.

Mastro told US District Judge Lewis A. Kaplan in New York that the provision in the lengthy judgement document that allows a near doubling of the award to US$18.2 billion appears to be punitive even though Ecuadorean courts supposedly do not award punitive damages.

"Chevron is not apologising," Mastro told Kaplan, saying the court process that led to the ruling was corrupt in a country where the rule of law has deteriorated so dramatically that it is recognised as being below the court procedures in place in Iran and North Korea. He asked Kaplan to extend a temporary ban the judge imposed on any judgement from Ecuador last week.

The judge had cited irreparable harm that could occur to Chevron if lawyers for Ecuadoreans seek to interrupt the company's business around the world to collect the penalty.

The judge did not immediately rule. He asked both sides to submit more information about the appeals process in Ecuador. And he suggested he was being drawn ever more deeply into the court case that began in 1993 with a lawsuit filed on behalf of 30,000 people who blamed Texaco for environmental contamination and illnesses that allegedly resulted from its operation of an oil consortium from 1972 to 1990 in Ecuador's Amazon. Texaco became a wholly owned subsidiary of Chevron in 2001.

"What you're really asking me to do is sit as an appellate court on the Ecuadorean trial," Kaplan told Mastro.

1998 agreement

Chevron has long argued that a 1998 agreement Texaco signed with Ecuador after a US$40 million clean-up absolves it of any liability in the case. It claims Ecuador's state-run oil company is responsible for much of the pollution in the oil patch that Texaco quit more than two decades ago.

Lawyers for the Ecuadoreans argued there was no reason to extend Kaplan's order beyond the 28 days he had originally allowed because Ecuador's attorney general has said that no collection efforts could begin until the end of the first stages of an appeals process. Lawyers said that means Chevron will not be required to pay anything for at least three to six months.

John Keker, an attorney for a New York lawyer whom Chevron has accused of acting improperly in the case, said he did not believe any collection efforts would occur for at least six months, and that it would be wrong to view a company as large as Chevron as unable to protect itself legally around the world.

"There's no basis to think that anything's happening in the next few months," he said.

Steven J. Hyman, a lawyer for two of the Ecuadorean plaintiffs, said he did not believe Kaplan has the authority to stop collection efforts against Chevron.

"With all due respect, you cannot speak to the world," Hyman told Kaplan. And he said there were no collection efforts to block.

"Nobody has taken a step, an inch, to get enforcement," he said.

The judge noted that even a lawyer for the Ecuadoreans had spoken disparagingly about the country's judges in a documentary the lawyer solicited about the court fight in Ecuador, saying judges there were corrupt.

"Am I supposed to ignore all of that?" Kaplan asked.

Norman Siegel, another lawyer for the Ecuadoreans, told Kaplan that the critical comments were the kind of First Amendment-protected exaggerations that are routinely made by lawyers.

"They get caught up in the moment," Siegel said.

- AP