Chevron has received a favorable ruling in the US Supreme Court which prevents the company from paying a compensation of $9.5bn for being responsible for an oil pollution incident in Ecuador.

The apex court denied a certiorari petition asking it to review a judgment from the US Court of Appeals for the Second Circuit that stuck to district court findings that a $9.5bn judgment in an Ecuadorian court against Chevron was a result of fraud and racketeering work, and cannot be enforced in the US.

An American lawyer Steven Donziger who fought on behalf of the Ecuadorean villagers to collect the amount from Chevron was found by the US District Court for the Southern District of New York to have committed extortion and other fraudulent activities.

Chevron vice president and general counsel R. Hewitt Pate said: “The facts of the Ecuadorian judicial extortion scheme and the illegality of the plaintiffs’ lawyer misconduct have been finally and conclusively affirmed by the legal system of the United States.

“Today’s decision is an important step toward bringing this illegal scheme to a final conclusion.”

The case dates back to the early 90s involving Texaco Petroleum (TexPet) which was acquired in 2001 by Chevron. It was TexPet’s consortium with Ecuadorian state-owned oil company, Petroecuador between 1964 and 1992 that was accused of causing environmental pollution owing to their operations in the Lago Agrio oil field.

In 1992, TexPet handed over its stake of the oil operations to Petroecuador pursuant to government condition that it should carry out a remediation work of certain sites while Petroecuador was to take care of any remaining cleanup.

According to Chevron, TexPet completed its remediation work and was cleared by the Ecuador government from further environmental liability. However, it says that Petroecuador failed to complete the promised cleanup following which a class action lawsuit was filed by the Ecuadorian villagers against Chevron in 2003.

Donziger said: "The refusal by the Supreme Court to address the fact Chevron fabricated evidence to cover up its massive pollution in Ecuador is a grave mistake and a sad reflection on the U.S. judiciary in the eyes of the world.

“That said, Chevron will be held accountable in Canada where courts have agreed to consider the overwhelming evidence Chevron bribed a witness and manufactured evidence to evade paying the Ecuador pollution judgment.”

Image: Oil pollution in the Lago Agrio oil field in Ecuador. Photo: courtesy of Julien Gomba/