Gibraltar Supreme Court Awards Chevron $38 Million Against Ecuadorian Conspirators
25 Mayo 2018 - 5:29PM
Business Wire
The Supreme Court of Gibraltar has issued a judgment against
Pablo Fajardo, Luis Yanza, Ermel Chavez, Frente de Defensa de la
Amazonia (the “Front”) and Servicios Fromboliere for their role in
a conspiracy to procure and attempt to enforce a fraudulent
Ecuadorian judgment against Chevron. The court awarded Chevron
Corporation $38 million in damages and interest and issued a
permanent injunction against the defendants, preventing them from
assisting or supporting the case against Chevron in any way.
Fajardo, Yanza and Chavez are Directors at Amazonia Recovery
Ltd. (“Amazonia”), a Gibraltar-based company set up to receive and
distribute funds that the co-conspirators hoped to obtain from the
corrupt Ecuadorian judgment. The company was established in 2012 by
Steven Donziger, the lead American lawyer behind the fraud, and his
associates. Donziger and Fajardo, an Ecuadorian lawyer, were found
by a U.S. Federal Court to have engaged in extortion, money
laundering, wire fraud, Foreign Corrupt Practices Act violations,
witness tampering and obstruction of justice. The Front, which has
long been involved in peddling a dishonest public relations
campaign against Chevron aimed at extorting a settlement from the
company, and Servicios Fromboliere, an Ecuadorian law firm
established by Fajardo, are both shareholders in Amazonia and part
of the extensive web of obscure entities established by the
participants in the fraud against Chevron to attempt to hide their
misconduct and profit from it.
Today’s ruling is the latest in a series of setbacks for
Donziger and his team, which has been unsuccessful in its attempts
to enforce the Ecuadorian judgment across a variety of
jurisdictions.
“In issuing this decision, the Supreme Court is holding the
perpetrators of this fraudulent enterprise accountable for their
actions,” said R. Hewitt Pate, Chevron’s vice president and general
counsel. “In courtrooms around the world, this fraudulent scheme
against Chevron Corporation continues to implode.”
This latest judgment against Donziger’s associates and their
supporting organizations follows a December 2015 ruling against
Amazonia itself, in which the Supreme Court of Gibraltar awarded
Chevron $28 million in damages and issued a permanent injunction
against Amazonia preventing it from assisting or supporting the
case against Chevron Corporation in any way. Chevron claims against
Amazonia asserted that the company is a vehicle to perpetuate the
ongoing fraud scheme against Chevron, with the express purposes to
procure funding for the scheme, fund the plaintiffs’ conspiracy,
issue shares of the company to lawyers, advisors and funders, and
receive and distribute proceeds from the corrupt Ecuadorian
judgment.
In 2015, Chevron filed similar claims in Gibraltar against
Fajardo, Yanza and Chavez, and later, in 2017, successfully joined
the Front and Servicios Fromboliere to the proceedings as
additional defendants. Despite orders from the court, and their
status as directors and shareholders in the Gibraltar company, the
defendants failed to acknowledge service of court documents or
participate in the proceedings. As a result, the court issued a
default judgment against the defendants, awarding Chevron $38
million. The award was based on legal fees and other costs incurred
by Chevron to uncover and combat the conspiracy. The Gibraltar
court also issued a permanent injunction prohibiting the defendants
from further participation in the scheme and ordered the defendants
to reimburse Chevron for any future expenses it incurs defending
itself against the fraud.
In addition to these developments in Gibraltar, efforts to
enforce the fraudulent Ecuadorian judgment have now been rejected
in Argentina, Brazil, Canada and the United States.
In the United States, in March 2014 Judge Lewis Kaplan of the
U.S. District Court for the Southern District of New York ruled
that the Ecuadorian judgment was the product of fraud and
racketeering activity, finding it unenforceable in the United
States and holding Donziger liable for RICO violations. In his
opinion, Judge Kaplan described Amazonia as a “Gibraltar
company…through which the property collected on the judgment is to
be funneled.”
In Brazil, in 2015 the Federal Prosecutor's Office issued a
recommendation to the country's Superior Court of Justice that the
judgment not be recognized for enforcement, finding that it was
"issued irregularly, especially under uncontested acts of
corruption" and that recognizing it would violate Brazilian and
"international public order." The Brazilian Superior Court of
Justice subsequently unanimously rejected attempts to enforce the
judgment in November 2017. On May 16, 2018 the Brazilian Superior
Court of Justice rejected attempts by the plaintiffs to limit the
scope of its decision through a motion to clarify.
Similarly, in 2016 Argentina's public prosecutor's office
recommended that its National Court reject the effort to recognize
the Ecuadorian judgment in that country. The National Court No. 61
in Buenos Aires dismissed the recognition action on October 31,
2017. An appeal is now pending.
In Canada, in January 2017 a court ruled that the Ecuadorian
judgment could not be enforced against Chevron Canada Limited, an
indirect subsidiary of Chevron. That decision was upheld on appeal
in on May 23, 2018 by the Ontario Court of Appeals.
Since the extent of Donziger and his team’s fraud scheme was
revealed, more than a dozen former insiders and allies have
abandoned the effort, including Donziger’s former co-counsel,
environmental consultants, funders, investors, employees and
Ecuadorian collaborators.
Chevron Corporation is one of the world's leading integrated
energy companies. Through its subsidiaries that conduct business
worldwide, the company is involved in virtually every facet of the
energy industry. Chevron explores for, produces and transports
crude oil and natural gas; refines, markets and distributes
transportation fuels and lubricants; manufactures and sells
petrochemicals and additives; generates power; and develops and
deploys technologies that enhance business value in every aspect of
the company's operations. Chevron is based in San Ramon, Calif.
More information about Chevron is available at www.chevron.com.
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