Date: 19-Mar-10
Country: US
Author: Braden Reddall
 

Ecuadorean plaintiffs have appealed a U.S. judge's decision to allow Chevron Corp to seek arbitration of a case of alleged pollution in the Amazon rainforest with a potential $27 billion liability.

The plaintiffs, indigenous Ecuadoreans, filed the notice of appeal to the U.S. Court of Appeals for the 2nd Circuit on Thursday, a week after a judge ruled in favor of the second-largest U.S. oil company in its efforts to seek international arbitration.

Chevron cites violations under the U.S.-Ecuador Bilateral Investment Treaty in the case, which was originally filed in New York in 1993 and is now being heard by a court in Ecuador.

The company says Ecuador breached the treaty by not forcing that court to dismiss the lawsuit, in which indigenous people say Texaco, bought by Chevron in 2001, damaged their health and the forest and polluted rivers while operating there.

"After more than 17 years of litigation fraught with delay caused largely by Chevron itself, these individuals deserve to have their claims resolved in the forum that Chevron chose," Jonathon Abady, a lawyer who represents the rainforest residents, said in a statement.

Chevron says Ecuador and state oil company Petroecuador, Texaco's partner there, released Texaco from further liability in 1998 after the U.S. company's share of remediation work was complete. The validity of that release, however, is disputed by the plaintiffs.

Chevron has also complained of government interference in the case and said last year it uncovered a $3 million bribery plot linked to the Ecuadorean judge, who later recused himself.

U.S. District Judge Leonard Sand ruled on March 11 that arbitrators would determine the parameters for any proceeding by a tribunal whose members have been chosen, but which has not yet held a hearing.

"We have a high degree of confidence in the integrity of Judge Sand's ruling and doubt an appeal will be successful," Justin Higgs, spokesman for San Ramon, California-based Chevron, said in a statement.

The appealed case was in the U.S. District Court for the Southern District of New York, Yaiguaje et al v Chevron Corp and Texaco, No. 10-0316.

(Editing by Leslie Gevirtz)