Argentine Supreme Court Rejects Fraudulent Ecuadorian Judgment
SAN RAMON, Calif. July 31, 2020 – Argentina’s highest court unanimously rejected the plaintiffs’ final bid to enforce a fraudulent $9.5 billion Ecuadorian judgment against Chevron Corporation. This is the latest in a string of legal victories in Chevron’s global defense against the Ecuadorian judgment—found by U.S. courts to be the product of fraud, bribery, and corruption, and held unenforceable as a matter of international law by an international arbitral tribunal in The Hague.
On July 30, in a unanimous 5-0 decision, the Supreme Court of Argentina dismissed the plaintiffs’ appeal from the decision by the Court of Appeals in Buenos Aires of July 3, 2018, which affirmed the trial court’s opinion and dismissed the Ecuadorian plaintiffs’ action for lack of jurisdiction. Argentina’s courts have now uniformly and definitively rejected the plaintiffs’ attempt to recognize and enforce the Ecuadorian judgment in that nation.
With the decision of the Supreme Court of Argentina, the last pending proceeding seeking the recognition of the corrupt Ecuadorian judgment has come to an end. Decisions by courts and tribunals in the United States, Brazil, Canada, Gibraltar, The Hague, and now Argentina, confirm that the fraudulent Ecuadorian judgment should be unenforceable in any court that respects the rule of law. Even the Republic of Ecuador, a longstanding supporter of the litigation against Chevron, finally admitted in a public filing earlier this month that the $9.5 billion judgment issued by its courts against Chevron is “fraudulent.”
Chevron has defeated all actions to date seeking the recognition and enforcement of that judgment. In July 2019, after the Canadian Supreme Court declined to review a lower court opinion dismissing the action against Chevron’s indirect subsidiary in Canada, the plaintiffs dismissed their Canadian recognition proceeding. In November 2017, Brazil’s highest court dismissed a recognition action brought in that country. Prosecutors in both Brazil and Argentina had previously opined that the Ecuadorian judgment was unenforceable because it was the product of fraud and corruption.
The key remaining proceeding in connection with the corrupt Ecuadorian judgment is Chevron’s arbitration against the Republic of Ecuador before an international tribunal in The Hague. The tribunal ruled for Chevron on liability in 2018 and the arbitration is now in the damages phase, where Chevron is seeking to recover from the Republic of Ecuador costs Chevron has incurred to expose and defend against the fraud perpetrated against it.
In a unanimous 2018 decision, the international tribunal in The Hague—including the arbitrator chosen by Ecuador—held that the $9.5 billion judgment rendered against Chevron in Ecuador in 2011 was procured through fraud, including judicial bribery, blackmail, and extortion, culminating in the presiding judge allowing the plaintiffs’ team to ghostwrite the judgment itself in exchange for the promise of a bribe. Finding the evidence propounded by Chevron to be “overwhelming,” the tribunal held that “[s]hort of a signed confession by the miscreants . . . the evidence establishing ‘ghostwriting’ in this arbitration ‘must be the most thorough documentary, video, and testimonial proof of fraud ever put before an arbitral tribunal.’”
The international tribunal further held that Chevron was released by the Republic of Ecuador from the same environmental claims on which the fraudulent Ecuadorian judgment is exclusively based, following completion of a $40-million environmental remediation program approved by the Ecuadorian government. The international tribunal found that the Ecuadorian judgment violated international law and should not be enforced anywhere in the world.
The tribunal’s findings in The Hague are consistent with findings of U.S. courts. In 2014, the U.S. District Court for the Southern District of New York found that Steven Donziger and his team procured the Ecuadorian judgment against Chevron through fraud and racketeering, including extortion, money laundering, wire fraud, witness tampering, judicial bribery, Foreign Corrupt Practices Act violations, and obstruction of justice. The court prohibited enforcement of the Ecuadorian judgment in the United States and ordered the Ecuadorian plaintiffs and their lawyers to pay back to Chevron any enforcement proceeds they obtain anywhere in the world. The U.S. court judgment is now final after having been unanimously affirmed by the Court of Appeals and denied review by the Supreme Court. In 2018, Donziger was suspended from the practice of law for his misconduct in the Ecuador litigation. In May 2019, Donziger was held in civil contempt of court for his breach of the RICO judgment, which prevented him from profiting from the fraud, by selling interests in the Ecuadorian judgment to investors and using a large portion of the proceeds on personal expenses. In July 2019, Donziger was charged with criminal contempt due to his ongoing refusal to comply with court orders. Chevron is not a party to the criminal contempt proceedings.
Donziger is not the only Ecuadorian plaintiffs’ attorney implicated in what the Wall Street Journal has called the “legal fraud of the century.” Ecuadorian counsel Pablo Fajardo was condemned alongside Donziger by both U.S. courts and the arbitral tribunal in The Hague, which concluded that both “engaged in prolonged, malign conduct towards [Ecuador’s] legal system generally and, particularly, the Lago Agrio Court in a manner that almost beggars belief in its arrogant contempt for elemental principles of truth and justice.” In May 2018, the Supreme Court of Gibraltar issued a judgment against Fajardo and other participants in the fraud for their role in attempting to enforce the Ecuadorian judgment, awarding $38 million in damages to Chevron.
Published: July 2020