Canadian Manufacturing

Supreme court to rule on Chevron-Ecuador legal battle

Ecuadorian villagers are suing the oil giant in several jurisdictions, seeking damages for environmental contamination

OTTAWA—The Supreme Court of Canada rules this morning on whether Ecuadorian villagers have the right to use an Ontario court to seek billions in damages for environmental contamination from a major oil company.

The ruling won’t be the final word in the long-running legal saga that has played out in courtrooms across the Western Hemisphere.

But if the high court rules against the villagers, it will slam the door shut on the matter in Canada.

Chevron Corp. wants the Supreme Court to overturn a December ruling by the Ontario Court of Appeal, which said the villagers could pursue their action for damages in a Canadian court.

That appeal court ruling overturned a lower court judge, who ruled that Chevron Canada should not be held responsible for the judgment because its assets are not directly owned by the California-based multinational.

Chevron has no assets in Ecuador, but the country’s highest court has affirmed a $9.5 billion US judgment against the company.

Lawyers for the villagers have turned to courts in Brazil and Argentina, as well as in Canada, to collect on the judgment.

They haven’t gone after Chevron in the U.S. because a New York judge ruled in favour of the company, saying the judgment in Ecuador was obtained through fraudulent and corrupt means. That matter is under appeal as well.

That fraud ruling has no bearing on the case now before Supreme Court.

Today’s ruling turns on two specific legal issues:

  • Whether there is a real and substantial connection between the defendant and dispute on one hand, and the province of Ontario on the other.
  • Whether Chevron Canada can be tied to its larger corporate entity.

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