The Supreme Court of Canada Rules for Ecuadorian Villagers in Suit against Chevron (September 4, 2015) [1]
On September 4, 2015, the Supreme Court of Canada (the Court) decided [3] that villagers from Ecuador can enforce a $9.5 billion judgment against the Chevron Corporation through its Canadian subsidiary, Chevron Canada. In 2003, the villagers instituted legal proceedings against Texaco, which has since merged with Chevron, alleging that their commercial activities had caused “extensive environmental pollution that has, in turn, disrupted the lives and jeopardized the futures of its residents.” An Ecuadorian court found for the villagers in 2011, awarding $17.2 billion; a judgement which was later halved by an appellate court. After Chevron refused to acknowledge the trial and the judgment, arguing it does not possess assets in Ecuador, the villagers filed suit against one of Chevron’s subsidiaries in Canada. Chevron defended this suit alleging that the Canadian courts lacked jurisdiction because Chevron had no “real and substantial connection” to the Ontario court, which it argued exists only “if the defendant has assets in Ontario, or if there is a reasonable prospect of his or her having assets in Ontario in the future.” The Court refused this approach, stating that “Canadian courts, like many others, have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments” and that in order to recognize and enforce a foreign judgement “the only prerequisite is that the foreign court had a real and substantial connection with the litigants or with the subject matter of the dispute, or that the traditional bases of jurisdiction were satisfied.” It further held that “in actions to recognize and enforce foreign judgments within the limits of the province, it is the act of service on the basis of a foreign judgment that grants an Ontario court jurisdiction over the defendant,” which the plaintiffs had satisfied by serving Chevron Canada at its Mississauga, Ontario office. The Court also addressed the issue of comity, which “has consistently been found to underlie Canadian recognition and enforcement law” and “militates in favour of recognition and enforcement” of another state’s legitimate judicial actions.