Chevron's Star Witness In $9.5 Billion Corporate Sovereignty Case Admits He Lied

from the well,-that's-awkward dept

One of Techdirt's earliest posts on corporate sovereignty was back in October 2013, when we wrote about the incredible case of Chevron. It used the investor-state dispute settlement mechanism to suspend the enforcement of a historic $18 billion judgment against the oil corporation made by Ecuador's courts because of the company's responsibility for mass contamination of the Amazonian rain forest. Given the huge sums involved, it's no surprise that things didn't end there. As the site Common Dreams reports, in 2013:

Ecuador's National Court of Justice upheld the verdict but cut the initial mandated payment from $18 billion to $9.5 billion.

Chevron has repeatedly refused to pay the $9.5 billion ordered by Ecuadorian courts and even took the step of removing most of its assets from Ecuador in an apparent effort to avoid paying.

Chevron not only refused to pay, but asked a judge in New York to invalidate the claim. And that's precisely what happened in 2014, as Vice News explains:

California-based oil giant Chevron hailed a sweeping victory in a two-decade long legal battle in the Ecuadorian Amazon. A New York federal judge, Lewis Kaplan, ruled that a $9.5 billion Lago Agrio judgment leveled against the company by the small Andean country's highest court, was obtained by way of fraud and coercion.

Vice News notes that central to Chevron's case in New York was the testimony of Alberto Guerra, a former Ecuadorian judge:

In New York, Guerra testified that he had struck a deal between the plaintiffs [the Ecuadorian government] and the presiding judge [in Ecuador], Nicolas Zambrano: Guerra would ghostwrite the verdict, Zambrano would sign it, and the two would share an alleged $500,000 in kickbacks from the plaintiffs.

Pretty damning stuff, which seems to have played a major part in convincing the New York judge to dismiss the $9.5 billion award. But in a rather dramatic turn of events, the following just emerged:

Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true.

In keeping with the rest of the case, Guerra's confession is not entirely straightforward, and it's not clear what really happened during the 2013 Ecuadorian court case -- it's worth reading the fascinating Vice News story to get the full details of the continuing confusion. It does appear that the advantage has passed back to the government of Ecuador in this high-stakes legal battle, but it's by no means over -- all thanks to corporate sovereignty's disturbing power to overrule otherwise "final" rulings from national courts.

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Filed Under: alberto guerra, corporate sovereignty, ecuador, isds, rain forest
Companies: chevron