Summary

38183

Daniel Carlos Lusitande Yaiguaje, et al. v. Chevron Corporation, et al.

(Ontario) (Civil) (By Leave)

(Publication ban in case) (Sealing order) (Certain information not available to the public)

Keywords

Private international law - Foreign judgments, Enforcement, Judgments and orders, Summary judgments, Execution - Private international law — Foreign judgments — Enforcement — Judgments and orders —Summary judgments — Execution — Applicants seeking to have Ecuadorian court order enforced against assets of seventh degree subsidiary of respondent corporation — Whether shares of Chevron Canada are exigible pursuant to Execution Act, R.S.O. 1990, c. E.24 to satisfy enforceable judgment in Ontario — If shares not exigible under Execution Act, should Chevron Canada’s corporate veil be pierced so its shares and assets may satisfy Ecuadorian judgment against its corporate parent?.

Summary

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicants are Indigenous peoples of the Orienté region of the Republic of Ecuador. During the period from 1964 to 1992, oil exploration and extraction were undertaken on their traditional lands resulting in environmental pollution of the area. One of the corporations involved in the oil operations was an indirect subsidiary of Texaco Inc. that left Ecuador when its oil project was completed in 1992. Since 2001, Texaco has been part of the global conglomerate, Chevron Corporation (“Chevron Corp.”), a public company with its head office in California.

The applicants first sought compensation for the environmental devastation through a class action in the United States. Texaco successfully opposed that action on jurisdictional grounds. The applicants then commenced a new action in the Ecuadorian courts. The eventual result was a $9.5 billion USD judgment against Chevron Corp.

Chevron Corp. had no assets in Ecuador so the applicants sought to enforce of their judgment in the United States. Chevron Corp. opposed the enforcement of the judgment on the ground that it had been obtained by fraud. The United States District Court accepted Chevron Corp.’s submission and made an order enjoining any enforcement proceedings of the Ecuadorian judgment in the United States. That decision was upheld on appeal.

The applicants then commenced the present action in the Ontario Superior Court of Justice. The enforcement targets were the shares and assets of Chevron Canada Limited (“Chevron”), a seventh-level subsidiary of Chevron Corp. The parties agreed to determine by way of a summary judgment motion the issue of whether Chevron’s shares and assets were exigible to satisfy the judgment debt of Chevron Corp. The applicants had two primary submissions. First, they argued that the Execution Act permitted execution on Chevron’s shares and assets to satisfy the Ecuadorian judgment. Second, they submitted that the court should pierce the corporate veil in order to render Chevron Canada’s shares and assets exigible. The motion judge held that Chevron’s assets in Canada were not exigible to satisfy the Ecuadorian judgment. He further held that Chevron’s corporate veil could not be pierced. His decisions were upheld on appeal.