Supreme Court allows Ecuador pollution plaintiffs to sue Chevron Canada

The Supreme Court of Canada has today allowed Ecuador pollution plaintiffs to try to seek enforcement against Chevron Canada of a multibillion-dollar damage award against Chevron Corporation for oil pollution in Ecuador: Chevron Corp. v. Yaiguaje.

According to the court, this is a relatively simple question of the mutual respect owed between states. Those who obtain a “legitimate” foreign judgment may ask Canadian courts to enforce it in Canada against a defendant who operates and has assets here, whether or not there was a “real and substantial” connection between the lawsuit and the Canadian defendant.

However, the court went out of its way to emphasize that it is not prejudging any of the merits of the claim, including:

1. whether a judgment against Chevron can be enforced against Chevron Canada, which is a different company, and
2. whether there are other reasons not to enforce the judgment at all, i.e. whether the Ecuador judgment against Chevron is a “legitimate judicial act”, or not.

“Legitimate judicial acts should be respected and enforced, not sidetracked or ignored…..

The establishment of jurisdiction does not mean that the plaintiffs will necessarily succeed in having the Ecuadorian judgment recognized and enforced. A finding of jurisdiction does nothing more than afford the plaintiffs the opportunity to seek recognition and enforcement of the Ecuadorian judgment. Once past the jurisdictional stage, Chevron and Chevron Canada can use the available procedural tools to try to dispose of the plaintiffs’ allegations. This possibility is foreign to and remote from the questions that must be resolved on this appeal.

Further, the conclusion that the Ontario courts have jurisdiction in this case should not be understood to prejudice future arguments with respect to the distinct corporate personalities of Chevron and Chevron Canada or whether Chevron Canada’s shares or assets will be available to satisfy Chevron’s debt.”

Chevron has lost a skirmish against the Ecuador pollution plaintiffs, but the major battles are still ahead.