Permanent Court of Arbitration Panel Establishes Jurisdiction Over
Claims Against Republic of Ecuador
SAN RAMON, Calif.--(BUSINESS WIRE)--Feb. 28, 2012--
Chevron Corp. (NYSE:CVX) today announced that an international
arbitration tribunal, convened under the authority of the U.S.-Ecuador
Bilateral Investment Treaty (the “BIT”) and administered by the
Permanent Court of Arbitration at The Hague, ruled that it has
jurisdiction to hear Chevron’s claims against the Republic of Ecuador.
Chevron filed its request for arbitration in 2009, claiming that the
Republic violated its obligations under the BIT and international law.
Chevron’s arbitration claim stems from the government of Ecuador's
exploitation of the ongoing environmental lawsuit against the company in
Ecuador and its courts’ failure to administer justice in a trial that
has been marred by fraud.
Additionally, Chevron maintains that the government of Ecuador has
failed to uphold prior settlement and release agreements that the
government of Ecuador entered into with Texaco Petroleum Company (now a
Chevron subsidiary) when the consortium between Texaco Petroleum and
Petroecuador was terminated.
“With today’s decision, Chevron will proceed to the merits of its
arbitration to hold Ecuador responsible for the fraud being committed
through its judicial system. The documentary and video evidence of that
fraud is irrefutable. The dysfunction of Ecuador’s judiciary is well
documented in both the Lago Agrio case and the recent El Universo
case involving a ghostwritten judgment against journalists,” said Hewitt
Pate, Chevron vice president and general counsel. “Rather than allow
American plaintiffs’ lawyers to cause even more damage for which Ecuador
may ultimately be held responsible, the Republic should take this
opportunity to pursue a more constructive course.”
Chevron’s claim will now proceed to the merits phase of the arbitration.
In prior rulings, the tribunal has put the Republic on notice that if
Chevron’s arbitration ultimately prevails, “any loss arising from the
enforcement of (the Lago Agrio judgment) may be losses for which the
(Republic) would be responsible to (Chevron) under international law.”
On Feb. 16, 2012, the tribunal issued a Second
Interim Award ordering the Republic of Ecuador—and all of its
branches, including the judiciary—to prevent enforcement and recognition
of the $18.2 billion Lago Agrio judgment, both within and without
Ecuador. The award expands upon a prior award
requiring Ecuador to “take all measures at its disposal to suspend or
cause to be suspended the enforcement or recognition within and without
Ecuador of any judgment.”
In August 2011, a different international arbitration tribunal convened
under the BIT awarded
Chevron and Texaco Petroleum $96 million in a claim against the Republic
of Ecuador related to past oil operations. The tribunal found that
Ecuador's courts violated the BIT and international law through their
decade-long delays in ruling on certain commercial disputes between
Texaco Petroleum and the Ecuadorian government.
The tribunal’s decision on jurisdiction may be accessed here.
A copy of Chevron’s 2009 arbitration claim may be accessed here.
Chevron is one of the world's leading integrated energy companies, with
subsidiaries that conduct business worldwide. The company is involved in
virtually every facet of the energy industry. Chevron explores for,
produces and transports crude oil and natural gas; refines, markets and
distributes transportation fuels and lubricants; manufactures and sells
petrochemical products; generates power and produces geothermal energy;
provides energy efficiency solutions; and develops the energy resources
of the future, including biofuels. Chevron is based in San Ramon, Calif.
More information about Chevron is available at www.chevron.com.
Source: Chevron Corp.
Chevron Corp.
Kent Robertson, +1-925-790-3819
