Earlier this week, an appellate court in Ecuador affirmed an $18 billion judgment against Chevron that was entered by a lower court in Ecuador in February 2011.  The plaintiffs are thousands of Ecuadoran villagers who seek compensation for harms they allege they have suffered due to contamination in the Amazon region of Ecuador. 

The plaintiffs allege that the contamination was caused by oil and gas operations of a consortium in which Texaco Petroleum participated from 1960 to 1992.  Chevron acquired Texaco in 2001.  Prior to that acquisition, Texaco contributed funds to a remediation project, and received a release from the Ecuadoran national and local governments.  Chevron has argued that the release was a complete settlement of all claims, including any private claims.  The plaintiffs assert that the release only covered governmental claims, not claims by private individuals.

The plaintiffs filed suit in federal court in New York about 18 years ago, but Chevron successfully fought to have the case transferred to Ecuador based on the legal doctrine forum non conveniens.  Chevron claims that, at the time it requested the case be transferred to Ecuador, that country had sound political and judicial systems, but that the country's political and judicial systems subsequently became corrupted.  Chevron asserts that the lower court in Ecuador denied Chevron due process, and that the multi‑billion dollar judgment entered against it was tainted by fraud.  The plaintiffs dispute that.

Chevron filed an action in federal court in New York earlier this year, seeking a permanent injunction placing a global ban on enforcement of the Ecuadoran judgment.  United States District Court Judge Lewis A. Kaplan entered a preliminary injunction purporting to bar the plaintiffs from enforcing their judgment anywhere in the world except Ecuador, where Chevron has no assets, and he scheduled a trial on Chevron's request for a permanent injunction. 

As reported in the Oil & Gas Law Brief on September 23, 2011, the United States Second Circuit Court of Appeals entered an order vacating the preliminary injunction and staying the litigation in the district court, thereby cancelling or at least postponing any trial on Chevron's request for a permanent injunction.  The Second Circuit did not issue a written opinion explaining the reasons for its order, but stated that it would issue an opinion later.  The opinion has not yet been issued.

Earlier this week, Chevron issued a statement declaring that it "condemns" the "illegitimate decision" by the appellate court in Ecuador.