OPINION
Monday , September 28, 2015 5
The Gates are Open
Supreme Court rules Ecuadorean plaintiffs allowed to pursue
enforcement of judgment against Chevron
james yap › contributor
I
n Yaigua je v. C hevron Corporation,
the plaintiffs, representing about 30,000
Ecuadorean villagers, seek damages from the
defendant for injuries resulting from environmental pollution. They originally filed their claim in
New York federal court in 1993, believing Ecuadorian
courts to be ill-equipped to conduct a fair trial in
such a matter. The defendants, however, sought
a forum non conveniens dismissal, arguing that the
Ecuadorian court system was fair and just. This jurisdictional dispute stalled the case for almost a decade,
until the Second Circuit Court of Appeals finally
granted the defendants a forum non conveniens stay
in 2002.
The plaintiffs filed suit in Ecuador the following year, and after another protracted legal battle
obtained a judgment against the defendants, which
has since been upheld by Ecuador’s Court of Cassation.
The judgment from the Ecuadorian court is worth
US$9.51 billion.
Subsequently, the defendant, who before the judgment had proclaimed the fairness and integrity of
the Ecuadorian courts, declared that the judgment in
Ecuador had been obtained by fraud, and that it would
refuse to pay it. This has spawned a cascading series
of subsidiary litigation battles around the world – the
dispute has spread to a whole host of other tribunals
including the Permanent Court of Arbitration in The
Hague, as well as domestic courts in the United States,
Brazil, and Canada. In Canada, the plaintiffs brought
proceedings against Chevron and its Canadian subsidiary, Chevron Canada, seeking to enforce the
Ecuadorian judgment in Ontario.
The question at the Supreme Court was whether
the Ontario court had jurisdiction over the defendants in the Ontario proceedings. Chevron, the
parent, argued that in order to hear enforcement proceedings in a Canadian court, the conventional test
for jurisdiction – whether there exists a real and substantial connection linking the Canadian forum to the
dispute – applies, and there was no such connection
here because Chevron had no business operations or
directly held assets in Canada. Chevron Canada, for its
part, argued that the Ontario court had no jurisdiction over it with respect to the subject matter of the
proceeding because it was not a party to the original
judgment.
Gascon J., writing for a unanimous Court, rejecte