Chevron Corp. v. Yaiguaje

Access to Justice
Corporate Accountability
Financial Liability
Oil & Gas

Chevron Corp. v. Yaiguaje [2015] SCC 42 (September 4, 2015)
Supreme Court of Canada   

Ecuadorian citizens who obtained a multi-billion dollar judgment against Chevron Corporation (Chevron) for extensive environmental pollution caused by oil operations in Ecuador brought an action to recognize and enforce the judgment in Canada.  Chevron sought to dismiss the case, claiming the Canadian court did not have jurisdiction. 

The Supreme Court affirmed that Canadian courts take a liberal approach to enforcing foreign judgments, stating: “[T]he only prerequisite is that the foreign court had a real and substantial connection with the litigants or with the subject matter of the dispute, or that the traditional bases of jurisdiction were satisfied.” Id., para. 27.  The Court refused to adopt the requirement that a party seeking to enforce a judgment must show a real and substantial connection between the defendant or the action and the enforcing court.  Such a requirement is not necessary, according to the Court, because the only purpose of the action is to allow a pre-existing obligation to be fulfilled and enforcement within Canada is limited to measures that can be taken only within the confines of the jurisdiction and in accordance with its rules.   Paras. 42, 46.  “In today’s globalized world and electronic age, to require that a judgment creditor wait until the foreign debtor is present or has assets in the province before a court can find that it has jurisdiction in recognition and enforcement proceedings would be to turn a blind eye to current economic reality.”  Para. 57.

Chevron also argued that Canadian courts lacked jurisdiction over it simply by virtue of the presence of a wholly-owned subsidiary within Canada (Chevron Canada).  Chevron urged the Court to declare that jurisdiction may not be attained unless there is a connection between the subject matter of the claim and the business conducted in the province as a prerequisite to finding jurisdiction. The Supreme Court dismissed this argument, stating that the company’s business presence in the country is enough to find jurisdiction.   Para. 81.

The Supreme Court concluded by stating: “Establishing jurisdiction merely means that the alleged debt merits the assistance and attention of the Ontario courts. Once the parties move past the jurisdictional phase, it may still be open to the defendant to argue . . . . any one of the available defences to recognition and enforcement . . . .” Para. 77.