A lower judge had ruled the plaintiffs had no access to assets of Chevrons Canadian subsidiary
A group of Ecuadorian Indians can seek enforcement of a $9.5bn (£5.8bn) judgement against US petrol giant Chevron in the Canadian courts, an Ontario appeals court has ruled.
Ecuadorian courts awarded the damages in 2011 and 2013 after the villagers sued over 18 years of pollution of the Amazon jungle in the Lago Agrio region.
Chevron has refused to pay, arguing the judgement was obtained through bribery.
Chevron is expected to appeal against the ruling to the Supreme Court.
The oil firm has also challenged the judgment under an international trade agreement between the US and Ecuador.
Tuesdays decision by the Ontario appeals court is the latest turn in the two-decade old case between Texaco, which has since been bought by Chevron, and the Lago Agrio villagers.
The unanimous decision by the three-judge panel overturns the ruling of an Ontario superior court justice, who found in May that Chevron had no assets in Canada and the plaintiffs could not gain access to the assets of Chevrons Canadian subsidiary.
Chevron was found guilty in Ecuador in 2011 of extensively polluting the Lago Agrio region between 1972-90. The company was ordered to pay $18bn in damages to the residents as a result of various environmental and health concerns, an amount subsequently reduced by a higher court.
Plaintiffs deserve enforcement
The residents say that the oil company knowingly dumped 18 billion gallons (68bn litres) of toxic waste water and spilled 17 million gallons of crude oil into the rainforest while operating in north-east Ecuador.
The affected area covers 4,400 sq km (1,700 sq miles) along the border with Colombia. The pollution has led to health problems such as cancer and birth defects, the villagers and their supporters say.
In the Canadian case, the villagers asked for a judgment against Chevrons assets held in Canada.
After all these years, the plaintiffs deserve to have the recognition and enforcement of the [Ecuadorian] judgment heard on the merits in an appropriate jurisdiction, the Canadian judges wrote in their decision.
At this juncture, Ontario is that jurisdiction.
The decision was signed by Justice James MacPherson and agreed by Justices Eileen Gillese and William Hourigan.
Chevron said it was evaluating its next steps, including a possible appeal against the ruling to the Supreme Court of Canada.
If the plaintiffs truly believed in the validity of the [Ecuadorian] judgment, they should seek enforcement in the United States, where Chevron Corp resides, the company said.