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Chevron Seeks Annulment of Rulings by Ecuadorian Judge.

Company Says Decisions Regarding Cabrera's $27 Billion Damages Report Are Tainted and Unusable

SAN RAMON, Calif. -- Lawyers for Chevron Corp. (NYSE:CVX) have filed a motion with the Provincial Court of Sucumbios in Ecuador to annul all rulings made by the judge who last week stepped down from presiding over an environmental lawsuit against the company in Lago Agrio.

Judge Juan NASez appeared at meetings arranged by representatives of the government and ruling Alianza PAIS party, who as part of a multi-million bribe scheme, sought to assure prospective environmental remediation contractors that they could get remediation work arising from an adverse judgment against Chevron. In those meetings, Judge NASez confirmed that he would find Chevron liable and order it to pay money to the government, even though the trial is still ongoing and evidence is still being received. His involvement in the meetings was revealed in video recordings made by the businessmen and released to the public and authorities in Ecuador and the United States by Chevron last week.

Following release of the videos, and purportedly at the request of Prosecutor General Washington Pesantez, Judge NASez asked to be removed from the case.

Chevron contends that a number of Judge NASez's rulings explicitly facilitated and shielded from scrutiny the $27 billion damages report filed in the case by Richard Cabrera, a mining engineer with no relevant experience in either oil field operations or oil field remediation. Cabrera was paid by the plaintiffs and worked closely with them in drafting his report. Chevron lawyers argue that, among other things, NASez unjustly sided with the plaintiffs by arbitrarily denying Chevron's challenges to the report, preventing a rigorous examination of the numerous fundamental flaws of the work process and research that supported his disputed recommendations. The company asserts that the Cabrera report is not based on valid scientific evidence or law.

Lawyers for Chevron filed motions with the court this week to have Judge NASez's rulings annulled and to formally seek recognition from the court that NASez should be recused.

Chevron's court filing seeking the annulment states: "Judge NASez is biased and has engaged in improper behavior while presiding over this case.... Judge NASez's acts are expressly prohibited by the Constitution and the law, and therefore, constitute a flagrant violation of Chevron's rights."

The filing points out in conclusion that if Judge NASez's rulings were allowed to stand, "Chevron would be denied the right to impartial justice and due process guaranteed by the Constitution."

Chevron has raised numerous significant complaints about the Cabrera report, including:

* Unsupported findings of contamination: Cabrera didn't visit all the sites but declares all are in need of remediation; his testing didn't include a single water sample from a municipal water supply, drinking water well, river or stream yet claims that all drinking water systems should be replaced;

* Grossly inflated cost estimates for soil remediation: Cabrera says pit remediation will cost $2.7 billion, or about $3million per pit, but the current, actual costs are $85,000 per pit;

* Unsubstantiated cancer claims: Not one medical record or name is associated with the cancer claims in his report and the cancer rate he claims is more than 250 times higher than the official rate published by the Government of Ecuador; Cabrera copies passages from the plaintiffs' filing almost word-for-word and assesses $9.5 billion in damages without naming a single victim;

* Non-existent unjust enrichment claims: Cabrera assesses $8.3 billion for unjust enrichment even though the company earned less than two percent of the $25 billion in total revenue generated by the consortium with Petroecuador over 25 years; the unjust enrichment concept has no basis under Ecuador law.

Editor's Note

To review the comprehensive information about the case, or to view and learn more about the videos recordings of Judge NASez released last week, please visit
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Publication:Business Wire
Date:Sep 12, 2009
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