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Supreme Court of Canada affirms international enforcement of the law, allows Ecuadorans to pursue Chevron assets in Canada

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The Supreme Court of Canada

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In a small but significant step towards ending corporate impunity for destroying the environment and people's health, the Supreme Court of Canada has ruled that Ecuadoran villagers should be allowed to try to get hold of Chevron assets in Canada, to collect on the $9.51 billion (USD) that Ecuadoran courts had awarded them for extensive pollution of the Amazon rainforest.

MiningWatch Canada intervened in the case (Chevron Corp. v. Yaiguaje, 2015 SCC 42) in order to support the idea that transnational corporations should be held to account for their abuses, regardless of where they took place. As part of a joint intervention, we argued that there should be no jurisdictional barriers to plaintiffs seeking to enforce foreign judgments against corporations that have been held to account for environmental or human rights abuses in foreign courts. We also told the Court that in some cases the "corporate veil" -- the legal fiction that different subsidiaries of the same company are separate and independent -- may need to be "pierced" to ensure that transnational corporations are held accountable for human rights violations committed by their wholly-owned and controlled subsidiaries.

The Ecuadorans' lawyer, Alan Lenczner, made similar arguments, but our intervention was aimed at providing the Court with more background on the range and seriousness of human rights abuses perpetrated by transnational corporations, and the crying need to allow justice to be served for the victims of those abuses -- wherever they happen.

While the judgment does not, by itself, accomplish anything more than allowing the Ecuadorans' court action to proceed, this is a significant step, since it provides a firm precedent for other plaintiffs seeking to enforce favorable rulings from their own courts against companies in Canada, even if they are subsidiaries of other transnationals. As the Court noted,

In today's globalized world and electronic age, to require that a judgment creditor wait until the foreign debtor is present or has assets in the province before a court can find that it has jurisdiction in recognition and enforcement proceedings would be to turn a blind eye to current economic reality.

We are pressing for access to justice in Canada for victims of Canadian companies, and we are supporting a number of legal actions against Canadian transnationals in Canadian courts, but at the same time it is vitally important for the legal systems in other countries to be strong enough to put a stop to the impunity enjoyed by transnational companies and their local representatives. It is also vitally important that when legal systems in other countries do actually hold corporations to account, the Canadian legal system lend its help in enforcing these foreign judgments.

Just this week, we just published a groundbreaking report that clearly shows how Canadian mining interests are implicated in the criminalization -- and even murder -- of local opposition leaders, often with the full support of the Canadian government. Access to justice in Canada is crucially important for the victims, but access to justice at home is just as important. This ruling recognizes the validity of the Ecuadoran legal system, and holds out promise for our partners in several other countries who are struggling for justice within their own legal system. It sends a strong message that Canadian courts will not allow corporations to hide behind jurisdictional boundaries to avoid the enforcement of foreign courts' judgments.

The ruling's unequivocal tone -- and the fact that it was unanimous -- are also a positive signal. There are a number of lawsuits under way in Canada that may well end up before the Supreme Court in some respect: Hudbay Minerals, Tahoe Resources, Nevsun Resources. We hope that the Supreme Court will take a similarly internationalist approach to the rights of foreign claimants as it has to the recognition and enforcement of foreign judgments.

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The Supreme Court decision is available online: http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/15497/index.do

The Court's docket for the case is also online at http://www.scc-csc.gc.ca/case-dossier/info/dock-regi-eng.aspx?cas=35682

A number of big law firms have published commentaries on the case. Here are two recommended by our lawyers:

  1. McCarthy Tetrault, Chevron Corp v. Yaiguaje: SCC Decision Highlights Increased Litigation Risk for Canadian Companies for Misdeeds of their Foreign Affiliates https://www.mccarthy.ca/article_detail.aspx?id=7151 “The Supreme Court of Canada’s most recent decision in Chevron Corp. v. Yaiguaje has significantly increased the litigation risk for companies with assets in Canada from plaintiffs seeking to enforce foreign judgments obtained against the foreign affiliates of such companies.”
  2. Torys, SCC on Foreign Judgment Debtors and Canadian Courts http://www.torys.com/insights/publications/2015/09/scc-on-foreign-judgment-debtors-and-canadian-courts. “Canadian corporations may be called on to satisfy foreign judgment debts of their parent corporations. A Canadian corporation that is a stranger to a foreign judgment may nonetheless be on the hook to satisfy a foreign judgment debt of one of its related corporate entities.”

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