Ecuadoran villagers can seek to enforce in Canada a multi-billion-dollar Ecuadoran judgment against Chevron for polluting the Amazonian rainforest, a Canadian court ruled Tuesday.

The Ontario Court of Appeal overturned a lower court decision that had quashed the villagers' attempt to seize the assets of a Chevron subsidiary as partial payment.

It gave Chevron 30 days to file a defense, in the latest twist in years of litigation over environmental damage in Ecuador's Amazon basin.

Chevron said in a statement that it was evaluating its next step, including possibly taking the fight over jurisdiction to Canada's Supreme Court.

Meanwhile, the two sides continue parallel legal fights in the United States and Brazil.

The villagers who brought the original lawsuit over decades of oil pollution in the Amazon had asked the Ontario Superior Court to force Chevron to hand over Can$12 billion (US$11.3 billion) in Canadian assets held by subsidiaries.

The oil company has refused to pay, alleging fraud and bribery was used to obtain the ruling in Ecuador, and maintains its Canadian subsidiaries are wholly independent and have nothing to do with the case.

"If the Ecuadoran plaintiffs truly believed in the validity of the Ecuadoran judgment, they should seek enforcement in the United States, where (parent company) Chevron Corp. resides, rather than targeting assets of the company's subsidiaries that are not parties to the Ecuadoran litigation," Chevron said in a statement.

Under the original ruling, Chevron was ordered to pay a US$9 billion fine for polluting the Amazon when the US oil company Texaco operated in Ecuador between 1964 and 1990.

Chevron acquired Texaco in 2001. The fine, later increased to US$19 billion, was reduced by Ecuador's Supreme Court to US$9.51 billion in November.

Thousands of villagers in the polluted area say they were sickened and say many have cancer from the contamination of their water supply from oil spillage.

Chevron contends that Texaco paid all of the required clean-up costs before exiting the country in the 1990s.

In his decision, Ontario Court of Appeal Justice James MacPherson said: "Even before the Ecuadoran judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost.

"He said, 'We're going to fight this until hell freezes over. And then we'll fight it out on the ice.' Chevron's wish is granted," MacPherson said.

"After all these years, the Ecuadoran plaintiffs deserve to have the recognition and enforcement of the Ecuadoran judgment heard on the merits in an appropriate jurisdiction.

"At this juncture, Ontario is that jurisdiction."