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54TH ANNUAL ACADEMY OF AMERICAN AND INTERNATIONAL LAW

May 21 - June 23, 2017 in Plano, Texas, USA

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Chevron Slams Canadian Backdoor in $9.5 Billion Pollution Fight www.bloomberg.com

Now entering its 24th year, an international legal war seeking to hold Chevron Corp. liable for oil pollution in the Amazon has featured battles in courtrooms ranging from the U.S. to Ecuador to Canada. In a blow to Ecuadorian villagers who contend the company sullied their lands, an Ontario judge last week protected Chevron’s Canadian assets from being seized as part of the fight.

That’s a big victory for the second-largest U.S. fossil fuel company, because in 2011 Chevron lost a court case in Ecuador over the question of liability. As far as the Ecuadorian judiciary is concerned, Chevron owes some $9.5 billion, plus interest, to the villagers. But the energy giant, contending that the enormous judgment was obtained by fraud, has refused to pay. Chevron has no assets in Ecuador, so there’s nothing there for plaintiffs to seize. That’s why the case migrated north to Canada, where a subsidiary has operations the villagers would like to liquidate to cover their verdict.

But in a highly technical 35-page opinion, Judge Glenn Hainey of the Ontario Superior Court of Justice made a sharp distinction between Chevron the parent corporation and Chevron Canada the subsidiary. Chevron Canada wasn’t the defendant in Ecuador and as a legally separate entity, the judge held, can’t be held responsible for its parent’s liabilities.

Chevron hailed the decision. “Once again, the plaintiffs’ attempts to enforce their fraudulent judgment have been rebuked,” R. Hewitt Pate, Chevron’s vice president and general counsel, said via email. “We are confident that any jurisdiction that examines the facts of this case and the misconduct committed by the plaintiffs will find the Ecuadorian judgment illegitimate and unenforceable.”

Karen Hinton, a New York-based spokesperson for the villagers, said in a statement that her clients will appeal Hainey’s ruling, and predicted a swift reversal. “The villagers expect to proceed later this year with their seizure of Chevron’s assets to force the company to respect multiple [Ecuadorian] court judgments that found it” liable for massive contamination, Hinton added.

The very long story that brings us to this moment began in 1993 with a lawsuit filed in New York federal court against Texaco (which Chevron acquired in 2001). Brought on behalf of poor rural Ecuadorians, the complaint was dismissed by U.S. courts and restarted in 2003 in Ecuador. Eight years later, it led to the multibillion-dollar verdict now at issue. Chevron countered that any pollution resulting from Texaco’s activities in the rain forest was the responsibility of the Ecuadorian government to clean up—and, in any event, the verdict was tainted by the misconduct of the villagers lawyers, led by a New York-based attorney named Steven Donziger.

To drive home that last point, Chevron sued Donziger in 2011, obtaining a U.S. judgment that he’d violated anti-racketeering laws by turning the Ecuadorian suit into the equivalent of an extortion scheme. Last year, a federal appeals court upheld the ruling, finding that Donziger and his colleagues engaged in coercion, fraud, and bribery in Ecuador. The decisions have the effect of making it impossible for the villagers to collect on the Ecuadorian verdict in the U.S. That brings us to Canada.

The legal complexities in this branch of the litigation proliferate. In a separate part of his Jan. 20 ruling, Judge Hainey said that if somehow the Ecuadorians succeed in moving forward with their action in Canada—for example, if a higher court reversed his finding that the subsidiary should be shielded—then the oil company would be allowed to fight asset seizures by pointing to the evidence of fraud presented in the U.S. racketeering case.
Meanwhile, on other fronts, the plaintiffs have started legal proceedings to enforce the controversial Ecuadorian judgment in both Argentina and Brazil. Chevron may have won this battle, but the legal war shows no sign of letting up.

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Blackstone readies new Asia real estate fund of at least $5 billion: sources www.reuters.com

Blackstone Group LP (BX.N) is readying a new Asia-focused real estate fund that aims to raise a record $5 billion or more, betting on strong returns from property investments in the region, people familiar with the plans told Reuters.

The world's biggest alternative asset manager will likely launch the fund in the next 12-16 months, the people said. It has invested more than 70 percent of the $5.08 billion it raised in its first Asia-focused property fund, a threshold when buyout firms typically start considering and preparing for follow-up capital raising.

New York-based Blackstone intends to boost investments in assets such as warehouses and shopping malls in China, India, Southeast Asia and Australia, one of the people said.

Global investors have shown robust appetite for shopping malls, warehouses and other property assets in Asia as they have sought the relative safety and stable returns of real estate, buoyed by growing urbanization and rising incomes in its two most populous countries of China and India.

Underscoring this trend, 22 Asia-focused property funds raised a total of $10.6 billion in 2016, data provider Preqin said. There's already $33 billion of unused capital, or dry powder, in such Asia-focused real estate funds, it said.

Blackstone declined to comment on plans for a new Asia-focused real estate fund.

But when commenting on the fundraising outlook for 2017 in the company's third quarter earnings conference call, Blackstone's Chief Financial Officer Michael Chae said there were "significant" fundraises coming up next year, including a possible new Asia fund.

The people declined to be named because details of the new Asia fund aren't yet public.

Blackstone's first Asia-focused property fund, the $5.08 billion Blackstone Real Estate Partners (BREP) Asia that closed in 2014, is the biggest such fund to focus wholly on Asia, Preqin data shows. The new fund could exceed the first one in size.

The first Blackstone fund invested in Japanese residential real estate, office space in Australia and Chinese shopping malls, posting an internal rate of return of 17 percent through September 2016, according to Blackstone's most recent earnings report.

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In China, the company has a joint venture with developer China Vanke Co Ltd (2202.HK) for logistics investments. Blackstone sold $1.9 billion of commercial property to Vanke last year.

Blackstone is also one of the largest owners of office space in India. Embassy Office Park REIT, which Blackstone co-owns with local developer Embassy Group, is awaiting approval from authorities to launch the country's first ever real estate investment trust (REIT), which Thomson Reuters publication IFR reported could raise $500 million-$1 billion in a 2017 initial public offering.

(Reporting by Sumeet Chatterjee and Elzio Barreto; Editing by Muralikumar Anantharaman)

Amazon and Google fight crucial battle over voice recognition www.theguardian.com