YPF Sociedad Anonima S.A. (YPF)

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Ecuador to Sue Chevron in Argentina to Enforce Judgment
By Pablo Gonzalez on October 31, 2012

Ecuadorean plaintiffs will ask an Argentine court to enforce a $19 billion award against Chevron Corp. (CVX) in a lawsuit over pollution in the Amazon rain forest by seizing the company’s local assets, a lawyer for the group said.

An attachment order will be filed as soon as tomorrow in a Commercial Court of Justice in Buenos Aires, Pablo Fajardo, the Ecuadorean lawyer who represents the group, said today at a press conference in Buenos Aires. The group will ask to seize Chevron’s local Argentine unit, dividends, oil sales income and the company’s bank accounts in Argentina, Enrique Bruchou, an Argentine attorney with Bruchou, Fernandez, Madero & Lombardi, said at the same press conference.

The Ecuadoreans blame Texaco Inc., which Chevron acquired in 2001, for destroying the environment in the Lago Agrio region, damaging living conditions of 30,000 inhabitants.

Chevron, based in San Ramon, California, on Oct. 9 lost a U.S. Supreme Court bid to block the judgment imposed by an Ecuadorean court. The highest U.S. court let stand a federal appeals court ruling against Chevron that the Ecuadoreans can’t be barred from seeking to collect the award anywhere in the world.

“The Ecuador judgment is a product of bribery, fraud, and it is illegitimate,” Chevron said today in an e-mailed response. “The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law.”

Shale Partnership
The Ecuadorean group also plans to file an attachment order asking a Colombian court to do the same as the Argentine court, Bruchou said. Seizures may be expedited because of a treaty between the Latin American nations, he said.

Another related lawsuit was filed by the Ecuadoreans in the Ontario Superior Court of Justice in Toronto on May 30.

Chevron, the fourth-largest producer of oil in Argentina, signed a memorandum of understanding on Sept. 14 with YPF SA (YPF), Argentina’s biggest energy company, to analyze a partnership to jointly develop projects at the shale formation of Vaca Muerta.

“Any attachment of Chevron assets should not affect YPF but any proceeds from the partnership belonging to Chevron will become attachable,” Bruchou said. Alejandro Di Lazzaro, a YPF spokesman in Buenos Aires, declined to comment in an e-mail.

The Ecuadorean group estimates Chevron’s assets in Argentina at $2 billion, Bruchou said. The Argentine assets include a minority ownership in local pipeline Oleoductos del Valle SA. Chevron’s Colombian assets that may be attached include natural gas sales, which represent about two-thirds of the country’s production, Bruchou said.

Chevron Canada Ltd. will have a hearing on the lawsuit Nov. 28 in the Ontario Superior Court, Alan Lenczner, an attorney for the Ecuadoreans based in Toronto, said in a telephone interview today.

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at [e-mail]

To contact the editor responsible for this story: James Attwood at [e-mail]