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Ecuador Judge Rejects Chevron Request To Annul Recent Rulings

By Mercedes Alvaro, Of DOW JONES NEWSWIRES

QUITO -(Dow Jones)- A new local judge in Ecuador's region of Lago Agrio rejected Chevron Corp.'s (CVX) request to annul all rulings in a multi-billion dollar environmental lawsuit made by the judge's predecessor, who recently recused himself from the case amid a scandal.

Judge Nicolas Zambrano officially took over the Chevron case on Wednesday, after a provincial court accepted the recusal of judge Juan Nunez. Nunez withdrew from the case after Chevron released videos in August that it says implicated the judge in improper dealings. Nunez, though, has denied any wrongdoing, and said the videos were doctored. Chevron maintains that the videos are authentic and haven't been manipulated.

Chevron has filed several motions with the provincial court, aiming to remove Nunez and nullify his previous decisions in the $27 billion lawsuit, initiated by local Indian tribes, that say that Texaco operations caused environmental and health damage in Ecuador's Amazon region. Chevron, which acquired Texaco in 2001, argued that Nunez was biased and engaged in improper behavior while presiding over the case.

In a Wednesday ruling reviewed by Dow Jones on Thursday, Zambrano said that he "denies the Chevron petition."

Chevron spokesman James Craig said that the company will "challenge the ruling, which turns a blind eye, not only to Judge Nunez's obvious misconduct, but to the extensive evidence of prejudgment, corruption, and bias that have tainted the trial."

He added that the decision is "further evidence that Ecuador's judiciary has no intention of ensuring impartiality or rule of law."

Lead plaintiffs' attorney Pablo Fajardo said that Zambrano's decision is correct.

"The judge's decision is based in Ecuadorean laws. There are not legal reasons to accept the Chevron's request," he said.

Ecuadorean indigenous groups sued Texaco in the U.S. District Court in New York in 1993, alleging the company polluted the Amazon rain forest and rivers, causing environmental and health damage.

That court said the case should be resolved by an Ecuadorean court, and the plaintiffs filed a lawsuit in the small jungle city of Lago Agrio.

Zambrano is the fifth judge in the case.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@ dowjones.com

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  10-22-091853ET
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