Two years ago, lawyers at Patton Boggs were pondering what to do if their clients ever managed to get a judgment in a two-decade environmental litigation crusade against Chevron in Ecuador.

Since Chevron had no assets in Ecuador and U.S. courts had viewed the Ecuadorean court proceedings with a "jaundiced eye," the firm concluded that filing lawsuits in countries outside the United States could be a "more expedient" way to collect on what later turned out to be an $18.2 billion judgment.

That strategy, outlined in an August 2010 memo code-named "Invictus" that surfaced in discovery in related litigation in the United States, was finally executed on Wednesday as the Ecuadorean plaintiffs filed a lawsuit in Canada to enforce the award. The suit, filed in the Superior Court of Justice in Ontario, is the first attempt to collect on the February 2011 award since the 2nd U.S. Circuit Court of Appeals lifted an injunction that had prevented the plaintiffs from pursuing enforcement abroad.

The suit is expected to be the first of more to come. "We believe that in the month of June at least another action will be presented in another jurisdiction," said Pablo Fajardo, the lead Ecuadorean attorney for the plaintiffs, who spoke via an English translator in a conference call on Thursday. While he did not name the countries, Fajardo told Reuters in March that the plaintiffs would target Chevron's assets in Panama and Venezuela.

Lawyers for the plaintiffs presented a number of legal reasons why they picked Canada as home for their first lawsuit. Alan Lenczner of Lenczner Slaght Royce Smith Griffin, the Canadian lawyer handling the Ontario lawsuit, said Canada's legal system presents limited defenses with which Chevron could challenge enforcement. Those included whether the judgment was secured by fraud, if Chevron was denied justice or an opportunity to be heard, and whether enforcing it went against "public policy."

In an interview, the Ecuadoreans' lead lawyer at Patton Boggs, James Tyrrell, pointed to another factor in picking Canada: Its status as a member of the Commonwealth of Nations, mainly countries that were formerly British colonies. If the Canadian courts say the plaintiffs can collect on the Ecuadorean award, "you can take the Canadian judgment on a streamlined basis and enforce the judgment" in countries such as Britain, he said.

"We've carefully selected the jurisdictions that we believe would be favorable for enforcement of the Ecuadorean judgment," Tyrrell said.

Under Canadian case law, including a 2003 decision by the Supreme Court of Canada called Beals v. Saldanha, Chevron cannot revive arguments about fraud that were previously heard by the Ecuadorean court or that could have been heard by it, said Stephen Pitel, a law professor at the University of Western Ontario. "We need something that's new," he said.

But Chevron spokesman Kent Robertson said the company could still argue that the Ecuadorean court was "complicit in the fraud." Chevron has long argued that corruption and bribery in the Ecuadorean judicial system led to the ruling.

In a 2011 decision enjoining enforcement of the award, U.S. District Judge Lewis Kaplan determined there was "ample evidence of fraud in the Ecuadorean proceedings." The 2nd U.S. Circuit later vacated the injunction, but Chevron could still urge the Canadian courts to consider Kaplan's fraud finding.

Chevron could also argue that enforcing the award would run contrary to public policy. An international arbitration panel in February ordered Ecuador to do what it could to prevent enforcement of the judgment. Robertson said Chevron believes that Ecuador is already in breach of that order. "It can be argued that enforcement of a fraudulent judgment, particularly one that is currently being scrutinized by an arbitration panel, runs contrary to public policy goals and values," he said in an email.

But since the plaintiffs weren't parties to the arbitration, there's nothing stopping them from asking Canada to enforce the judgment, Lenczner said. And even if Canada didn't enforce the award, that's just one out of 30 countries where Chevron has assets. Meaning the fighting could keep going for years to come.

(Reporting by Nate Raymond)

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