It’s been a while since we last checked in on New York (former) attorney Steven Donziger and his merry band of Ecuadorian racketeers who attempted the extortion of a major energy company in what’s become known as the Chevron Shakedown. They attempted, over a period of years, to sue Chevron for alleged environmental damage in Ecuador using fraudulent means and the officers of a corrupt court. They tried suing in multiple countries, stacking up stunning losses at every step of the way, with Donziger eventually being found to have engaged in racketeering and losing his license to practice law in D.C. and New York.
But they had one avenue of appeal left. They had thrown their case on the mercy of The Hague, hoping an international court might treat them better. They managed to lose several rounds of appeals there as well, and now the Dutch high court has buried the case once and for all. (Forbes)
Between 2012 and 2013, the BIT Tribunal issued five awards and orders in favor of Chevron. In January, 2014, Ecuador filed a petition in the District Court of the Hague (the legal seat of the BIT arbitration) to set aside the above-mentioned arbitral awards. On January 20, 2016, the District Court rejected all of Ecuador’s claims. In 2017 the Hague Court of Appeal upheld the District Court’s decision. And last week, on April 12, 2019, the Dutch Supreme Court upheld the Court of Appeal’s decision. Last week’s decision means that the five arbitral awards are no longer subject to challenge. This includes the BIT Tribunal’s interim awards ordering Ecuador to “take all measures necessary” to prevent or suspend enforcement of the Lago Agrio Judgment worldwide and declaring Ecuador in breach of international law for having failed to voluntarily do so.
Here’s the kicker. Not only has the court rejected every one of Donziger and Ecuador’s claims, but they agreed to hear Chevron’s claims to damages stemming from these many years of fraudulent attacks by the would-be pickpockets. That case is expected to be resolved some time next year. While nothing in this life is certain, the findings handed down in the Dutch courts at each turn show their rejection of all of Ecuador’s claims as well as their conclusion that the entire affair was the result of endemic corruption and fraud.
With that in mind, if the court finds in Chevron’s favor, the eventual settlement Ecuador will have to pay them is estimated to run into the hundreds of millions. That probably still won’t be enough to cover all the costs Chevron has incurred in swatting down these pests, but it represents at least partial remuneration and a moral victory if nothing else.
Most of all, this final settlement may at least discourage other dishonest actors from attempting to score quick paydays from large companies just by threatening them with a lawsuit. Too often, companies pay off such hucksters simply to avoid a protracted court battle and all the costs such things entail. That only encourages others to try the same thing. This has been costly for Chevron, but it absolutely ruined Donziger and is on the way to blowing a serious hole in Ecuador’s budget.
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