Argentine Judge slaps Embargo on US$19bn in Chevron Assets
The order, signed by Civil Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment.
The order, signed by Civil Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment. The embargo applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, said Enrique Bruchou, the lawyer who represents the indigenous and farmer communities in Ecuador who brought the lawsuit.
In 2011, Chevron was found liable in Ecuador for dumping billions of gallons of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related health problems. A video on the case can be seen here; a written summary of the evidence can be read here; and a segment from the U.S. news show 60 Minutes on the case can be viewed here.
Since Chevron has refused to pay the Ecuador judgment despite submitting to jurisdiction there, lawyers for the affected rainforest communities filed an action last week to seize the oil giant's assets in Argentina. The affected communities filed asset seizure actions against Chevron in the last few weeks in Canada, Brazil, and Ecuador.
Chevron has at least $2 billion worth of assets in Argentina, said Bruchou. The freeze order applies to the entire $19 billon amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well.
“We are now on the fast track to collection in our two-decade struggle to force Chevron to clean up its awful environmental disaster,” said Luis Yanza, the Ecuadorian community organizer and driving force behind the lawsuit since it was filed in 1993.
“We are committed to holding Chevron fully accountable for the crimes it has committed against our indigenous peoples,” he added.
The move by the Argentine judge is the first time the plaintiffs have been successful in freezing assets outside their home territory of Ecuador. The assets will remain frozen until the court rules whether it will enforce the Ecuador judgment, which is expected to be relatively smooth given that the nation has signed a reciprocal enforcement treaty in the region that includes Ecuador.
The legal action in Argentina derives its authority in part from an international treaty in Latin America called the Inter-American Convention on the Execution of Preventive Measures. The treaty, which dates from the late 1970s, allows for the automatic freezing of assets of a defendant that fails to abide by the law and refuses to pay a final foreign judgment.
India Infoline Research Team / 08:44, Jun 26, 2015
IIFL is hosting 10 companies at a Management Roadshow in Mumbai today. The opening is a subdued start. US market saw minor losses with Dow, S&P 500 and Nasdaq closing marginally lower.