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US Appeals Court Weighs Consequences of Indonesians' Lawsuit Against Exxon


January 25, 2011


WASHINGTON -(Dow Jones)- A federal appeals court on Tuesday explored the potential consequences of allowing Indonesian villagers to sue Exxon Mobil Corp. (XOM) for alleged atrocities committed by Indonesian soldiers guarding a natural gas plant in the Aceh province.

A group of villagers alleges the soldiers, serving as Exxon's security forces, murdered, tortured, raped and kidnapped local residents. The alleged abuses took place from 1999 to 2001, during a period of civil unrest in the region.

Exxon says the claims are baseless and argued in court that there were a host of reasons the lawsuit should be thrown out.

During oral arguments Tuesday, company lawyer Sri Srinivasan said the plaintiffs were wrongly attempting to bring U.S. courts into a matter involving Indonesian soldiers and villagers that took place on that country's soil during a civil war.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit spent nearly two hours weighing two important legal questions. Would allowing the lawsuit to go forward interfere with U.S. foreign affairs? And can corporations be held liable at all in U.S. courts for violating international law?

The judges noted the Indonesian government has raised serious objections to lawsuit and questioned how the villagers could make a case against Exxon without implicating the Indonesian military.

The appeals court, however, also noted that the U.S. government, despite having previously expressed foreign-policy concerns abut the lawsuit, never has urged that it be dismissed in its entirety.

Agnieszka Fryszman, a lawyer for the plaintiffs, said the soldiers were " essentially privatized" and were under Exxon's control. She said the company was legally responsible for the soldiers' actions.

The case is John Doe VIII v. Exxon Mobil Corporation, 09-7125. A decision is expected in the coming months.

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