The $18 billion award given in Ecuador
against Chevron for environmental damage won't be enforced
by seizing Chevron Canada, according to Justice David Brown. The
epic legal battle to enforce this, allegedly
fraudulent, judgment has now spread around the globe.
Plaintiffs brought the original Ecuador lawsuit in 1993 against
Texaco Inc for pollution and health damage left after four decades
of oil extraction, not all of it by Texaco. Chevron, which has
never operated in Ecuador, inherited the case when it acquired
Texaco in 2001, despite a $40 million cleanup and settlement signed
with the Ecuador government. Chevron has counterattacked with
vehemence, including a New York lawsuit to have the award declared
a fraud. The plaintiffs' lawyers are now
seeking leave to withdraw from the New York case, due to
non-payment of their fees. Instead, the plaintiffs are trying to
seize Chevron assets, wherever they may be found. Judge Brown
summarized the Canadian status in Yaiguaje v. Chevron Corporation,
2013 ONSC 2527.
" In 2011 the plaintiffs, residents of Ecuador, obtained
a judgment in an Ecuador trial court which required the defendant,
Chevron Corporation, to pay damages of approximately $18 billion.
The trial judgment was upheld by an Ecuadorean intermediate court
of appeal which, the parties agreed, turned the trial judgment into
a final judgment for purposes of recognition and enforcement (the
 In 2012 the plaintiffs commenced an action in this Court
seeking recognition and enforcement of the Judgment. The plaintiffs
sued not only the judgment debtor, Chevron Corp., but also one of
its indirectly-held subsidiaries, the defendant, Chevron Canada
Ltd. .. both defendants have brought motions to ... stay this
Parent company doesn't own subsidiary's assets
Justice Brown granted the stay, on the ground that Chevron Corp.
has no assets in Canada. Its wholly owned but indirect subsidiary,
Chevron Canada, does have assets here, but the assets of a
subsidiary do not belong to the parent company. " .... By
way of my "bottom-line", I accept the following
submission made by Chevron in its factum:
117. [B]ecause Chevron Corp. does not have assets here, and
there is no reasonable prospect that it will do so in the future,
there is no prospect for any recovery here. To allow the
Plaintiffs' academic exercise to take place in the Ontario
judicial system would, therefore, be an utter and unnecessary waste
of valuable judicial resources ...
Let me explain why I have reached my conclusion....
 ...under Canadian law, a shareholder in a corporation does
not possess a legal or equitable interest in the assets of the
company....Accordingly, the plaintiffs' bald pleading that
Chevron beneficially owns the assets of Chevron Canada is
inconsistent with the basic principles of Canadian corporate
 ...(iv) The fact that a parent corporation operates a
number of world-wide companies as an integrated economic unit does
not mean that separate legal entities will be ignored absent some
compelling reason for lifting the corporate veil. Ontario courts
have not adopted the "group enterprise theory" of
corporate liability. I adopt, as an accurate statement of the
law prevailing in Ontario on this point, the following statements
by the United Kingdom Court of Appeal in Adams v. Cape Industries
Pic.: There is no general principle that all companies in a group
of companies are to be regarded as one. On the contrary, the
fundamental principle is that "each company in a group of
companies ... is a separate legal entity possessed of separate
legal rights and liabilities ... " Our law ... recognizes the
creation of subsidiary companies, which though in one sense the
creatures of their parent companies, will nevertheless under the
general law fall to be treated as separate legal entities with all
the rights and liabilities which would normally attach to separate
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