Chevron Loses Environment Case Appeal
"The judgment is enforceable, and in fact is being enforced simultaneously in Canada, Brazil, Argentina and Colombia."
January 30, 2013 | Jude Webber | Source: The Financial Times
Buenos Aires, Argentina – Chevron has lost its appeal in Argentina against asset freezes to enforce an Ecuadorean judgment for the oil major to pay record $19bn damages for environmental pollution and must spell out the impact in its results statement on February 1 or risk violating SEC rules, a lawyer for the Amazonian plaintiffs said.
Enrique Bruchou, an Argentine lawyer for the plaintiffs, said the three-judge appeals panel in Buenos Aires made public their unanimous ruling on January 30.
"In the immediacy of Chevron submitting its fully audited 2012 financial statements, we hope this will help the company, and in particular its audit committee and its auditors, focus on the need of recognising and accruing the loss contingency in their 2012 financial statements, in compliance with clear guidelines of the SEC rules and US GAAP," Mr Bruchou said in a statement.
Those rules, he said, required that a company factor into its financial statements a loss if it is "probable" and can be "reasonably estimated".
"We see here much more than a mere "probable" negative outcome of a pending litigation. We have here a litigation which resulted in a $19bn judgment against Chevron, issued by the jurisdiction (Ecuador) chosen by Chevron . . . The judgment is enforceable, and in fact is being enforced simultaneously in Canada, Brazil, Argentina and Colombia," he added.
The Argentine asset freeze, which affects 100 per cent of Chevron Argentina's stock, worth some $2bn, all of its dividends, its entire 14 per cent stake in an oil pipeline company, 40 per cent of revenue from oil sales and 40 per cent of its Argentine bank accounts, followed similar action to enforce the judgment in Canada and Brazil in May and June respectively.
