The Corporate Veil Matters

In two related decisions, the Ontario Court has said, resoundingly, that it will respect the corporate veil, even for complicated corporate groups with numerous subsidiaries. Both decisions involve the enforcement of foreign judgments, though appeals are likely given the amounts at issue.

In the first decision, Yaiguaje v Chevron Corporation, the plaintiffs, Ecuadorian villagers, obtained a judgment in Ecuador of US$9.5 billion against Chevron Corporation (Chevron). The Ecuadorians are trying to enforce the Ecuadorian judgment in Canada against Chevron and one of its wholly-owned indirect subsidiaries, Chevron Canada Limited (Chevron Canada). Chevron, against whom the Ecuadorian Judgment was granted, had no assets in Canada. However, Chevron Canada does. But it is a seventh-level indirect subsidiary of Chevron and is not a party to the Ecuadorian judgment.