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Saturday, July 31, 2010

Chevron-Ecuador verdict unlikely until 2011 -judge

* Blames 185,152 pages of documents in 17-year-old case

* Verdict had been expected later this year

By Braden Reddall

SAN FRANCISCO, July 30 (Reuters) - A verdict in a multibillion-dollar trial against Chevron Corp in Ecuador over rain forest pollution looks unlikely to be reached until 2011, according to the new judge on the case.

Responding to a request from the international arbitration tribunal to which Chevron appealed last year, the judge in the case estimated his verdict would not be reached for another eight to ten months.

"Nevertheless, this period may vary due to reasons beyond our control, or events we cannot foresee at this time in connection with the proceedings," Judge Leonardo Ordonez wrote last month in the letter, an emailed copy of which was seen by Reuters.

Ordonez, whose title is president of the provincial court of Sucumbios, cited documents numbering 185,152 pages associated with the 17-year-old case as the reason for the delay. A verdict had been widely expected this year.

Ordonez only became the judge in the case in February after the previous judge was secretly taped discussing the suit with two mysterious men, and recused himself.

The lawsuit contends that Texaco, bought by Chevron in 2001, polluted the jungle and damaged the health of local residents by dumping 18 billion gallons (68 billion liters) of contaminated water over two decades, before leaving the country in 1992.

"The judge's diligence to review carefully all the documents in the case is another indication that the Ecuadorean court has been fair and just to Chevron, despite the company's charges and numerous efforts both in U.S. and foreign courts to delay justice to the indigenous tribes and other Ecuadoreans living with the disastrous consequences of Texaco's contamination," said Karen Hinton, a spokeswoman for the plaintiffs, local Ecuadoreans.

Chevron, which has said it expects to lose the case but plans to appeal, has asked the court to disregard an expert who said it should pay $27 billion in damages.

The company has also filed an international arbitration claim, saying Ecuador has breached a bilateral U.S.-Ecuador investment treaty by not allowing the judicial system to operate independently of political influence.

Representatives of the plaintiffs have repeatedly accused the second-largest U.S. oil company of "forum shopping" in an effort to escape its liability.

Analysts at Morgan Stanley, detailing the judge's expectations for the verdict's timing in a note to clients, said the plaintiffs would likely seek enforcement of any verdict in late 2011, but expected Chevron would settle with them for something in the range of $2 billion to $3 billion.

Earlier on Friday, Chevron reported a better-than-expected jump in quarterly profit to $5.4 billion.

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