Case of the Day: Yaiguaje v. Chevron Corp.

The case of the day is Yaiguaje v. Chevron Corp., 2013 ONCA 758. This is the appeal of the Ontario Superior Court’s decision staying the Lago Agrio plaintiffs’ action for recognition and enforcement of the Ecuadoran judgment, which we covered in May 2013. Antonin Pribetić has early reaction to the new decision at The Trial Warrior, as does Doug Cassel here at Letters Blogatory. As I did in the prior post, I am not going to try to comment at length about the merits of the decision—I will leave that for the Canadian lawyers—but instead just to give my big-picture impressions.

The Court of Appeal agreed with the lower court that the lower court had jurisdiction. I gave my reasons in the prior post for believing, at least from an American perspective, that this is basically right. Here is my non-technical statement of my view:

Leaving doctrine aside, if I sue you in the Canada and win a judgment for damages, and if you have assets in the United States, and if a US court decides that it lacks personal jurisdiction over you when I bring an action for recognition and enforcement of the Canadian judgment, then you have effectively found a way to shield your assets from your creditors, which is contrary, in my opinion, to public policy. The merits of the case have already been decided; I am simply trying to collect what a court has found I am owed.

The Court of Appeal, in insisting that the plaintiffs need only show a “real and substantial connection” with Ecuador (the country where the merits were litigated), not Canada (the country where recognition is sought), seems sympathetic with my reasoning.

But the Court of Appeal disagreed with the lower court that a stay was appropriate. I was lukewarm about the stay in the prior post. Again speaking non-technically: it may be true that at the end of the day there will be little if anything available to be taken on execution in Ontario, but presumably a judgment creditor can be trusted to seek recognition and enforcement only in jurisdictions where it is efficient to do so. I could imagine an argument about forum shopping and gamesmanship, but in the context of this case it would be difficult for Chevron to make such an argument with a straight face, insofar as Chevron has spent a lot of time and money in effect opposing recognition and enforcement in the United States, a jurisdiction where the plaintiffs have not and probably will not ever seek to have the judgment recognized. As the court noted: “it is a risky practice for a judge to second-guess counsel on strategy in the name of judicial economy.”

William Blake, Lucifer, from Dante Inferno Canto 34
Hell Freezes Over
I present to you the best part of the judgment without comment:

Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost. He said: “We’re going to fight this until hell freezes over. And then we’ll fight it out on the ice.”

Chevron’s wish is granted. After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction.

This Post Has 4 Comments

  1. Gustavo Domínguez

    Ted,
    I am glad that you also understood how the judges dislike Chevron’s arrogant commentary, and used it to give Chevron a lesson. However, I agree with The Trial Warrior Blog which concludes saying that the Yaiguaje decision will have a significant impact beyond the recognition or enforcement of foreign judgments. The Court of Appeal has sent a strong signal to multinational corporations that it may assert jurisdiction over foreign parent companies and their Canadian subsidiaries, which arrange their corporate affairs in a manner to avoid judgment creditors and will not hesitate to pierce the corporate veil, if and when necessary.

    1. Ted Folkman

      Gustavo, you may or may not be overreading the Court’s attitude toward Chevron. My feeling is it’s probably a mistake to draw any conclusions from the opinion’s amusing “your wish is granted” language. I think the jurisdictional point is significant, but I am not sure it is particularly aimed at Chevron or at multinational companies. I think it would be a good thing if courts agreed that once a judgment exists, defenses such as forum non conveniens, want of personal jurisdiction, etc., generally will fall by the wayside. Of course, now the LAPs, having won the right to have the court decide, need to persuade the court that their judgment is entitled to recognition and enforcement in Ontario!

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