Chevron goes to trial over $18b Ecuador award

A protester from Ecuador holds up an oil covered hand as she demonstrates against Chevron's Racketeer Influenced and Corrupt Organizations (RICO) trial in New York, October 15, 2013. Chevron Corp will try to convince a US judge this week that a group of Ecuadorean villagers and their US lawyer used bribery to win an $18 billion judgment against Chevron from a court in Ecuador, in the latest chapter in a long-running fight over pollution in the Amazon jungle. In a trial starting Tuesday, the oil company is asking a federal court in New York to prevent the villagers and their Harvard-educated lawyer, Steven Donziger, from using US courts to enforce the Ecuadorean judgment. [Photo/Agencies]

In a trial starting Tuesday, the oil company is asking a federal court in New York to prevent the villagers and their Harvard-educated lawyer, Steven Donziger, from using US courts to enforce the Ecuadorean judgment.

A victory in the United States would likely help Chevron's defense in other countries where Donziger and the villagers may seek to enforce the judgment.

"We believe that any jurisdiction that observes the rule of law will find that the judgment is illegal and unenforceable because it's a product of fraud," said Morgan Crinklaw, a spokesman for Chevron.

Donziger and the villagers say they did nothing wrong in obtaining the judgment, and they accuse the judge in the US case, District Judge Lewis Kaplan, of bias against them.

"These claims by Chevron are utterly baseless," said Chris Gowen, a spokesman for Donziger and the Ecuadoreans.

The trial is the latest chapter in a dispute over environmental contamination between 1964 and 1992 at an oil field in northeastern Ecuador operated by Texaco, which Chevron bought in 2001.

Chevron says Texaco cleaned up its share of waste before turning the field over to state-owned Petroecuador. But in 2011, an Ecuadorean court awarded $18 billion to people from the village of Lago Agrio, which was affected by the pollution. The court subsequently increased the award to $19 billion to cover fees.

Donziger and the Ecuadoreans have been unable to collect the award in Ecuador because Chevron no longer has operations there.

In 2011, Chevron obtained an injunction from Judge Kaplan in New York blocking enforcement of the judgment anywhere outside Ecuador. The 2nd US Circuit Court of Appeals later reversed that ruling.