US district court tosses out judgment against Chevron in Ecuador

The US District Court for the Southern District of New York has ruled that the $9.5 billion judgment against Chevron Corp. subsidiary Texaco Petroleum Co. in Ecuador was the product of fraud and racketeering and thus unenforceable.

The ruling comes nearly 6 months after an international tribunal determined that agreements signed by the Ecuadorian government in 1995 and 1998 released Texaco from environmental liability for land on which it once produced oil (OGJ Online, Sept. 18, 2013).

Ecuadorian villagers alleged that Texaco had polluted the Lago Agrio oil field in the northeastern part of the country during 1964-92. Chevron, which bought Texaco in 2001, said the company spent $40 million on environmental remediation and was released from further liability, and that the environmental damage occurred after Texaco relinquished control of the field.