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The Hague Court Ruling Favours Chevron in Ecuador Dispute

The District Court of The Hague has backed Chevron Corporation CVX on its long-standing legal fight with the Republic of Ecuador in relation to an unfavorable 2011 judgment that falsely implicate the company on alleged grounds of pollution. The court sentence involved land and water pollution claims by Texaco — acquired by Chevron in 2001— in Ecuador’s Lago Agrio region of the Amazon rain forest from 1964 to 1992.

This new ruling follows the verdicts of courts in Argentina, Brazil, Canada, Gibraltar and the United States, thereby disapproving the Ecuadorian judgment against Chevron. The ruling supports a 2018 arbitral award issued by an international tribunal administered by the Permanent Court of Arbitration that commanded Ecuador to stop enforcement of the Chevron judgment and overruled the country’s effort to have the decision terminated.

Per the tribunal’s unanimous award, the judgment in the Ecuador court was a result of fabricated evidence and fraudulence. It further concluded that the presiding judge was bribed and the verdict ghost-written.

Management informed that earlier this year, Ecuador had filed paperwork, admitting that the conviction against the company was fraudulent. This San Ramon, CA-based entity is resorting to legal aid for compelling Ecuador to pay for its legal bills.

About the Company

U.S. oil major Chevron is one of the largest publicly-traded oil and gas companies in the world with operations spread to almost every corner of the globe. A component of the Dow Jones Industrial Average, this energy player is a fully-integrated company, participating in every energy-related process, ranging from oil production to refining and marketing.

Zacks Rank & Key Picks

Chevron currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the same space are Murphy USA Inc. MUSA, Laredo Petroleum, Inc. LPI and SilverBow Resources Inc. SBOW, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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