Chevron v Ecuador – Award Rejected By Ecuador

April 1, 2010

The Associated Press is reporting that Ecuador has unsurprisingly taken the position that they will not accept the partial award on the merits made earlier this week.

Understandably so, given that the award implies that the judicial system in Ecuador is ineffective at best and jaundiced against (at least some) foreign claimants at worst.

QUITO, Ecuador — Ecuadorean officials are rejecting an international arbitration tribunal’s ruling that it violated international law and must pay $700 million to the Chevron Corp.

President Rafael Correa’s administration is analyzing options for appeal under national and international law, Attorney General Diego Garcia said in a statement Wednesday.

“This new effort to compromise the Ecuadorean state in its firm commitment to respect the independence of its judicial system … will not succeed,” Garcia said.

Read the full article here

Two major avenues that immediately suggest themselves for Ecuador. The first is that Ecuador can appeal the award to a competent court. The second is to resist enforcement under the New York Convention and on the grounds of sovereign immunity. Both look like viable options.

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Chevron & Texaco v Ecuador – Denial of Justice Reaffirmed

April 1, 2010

The UNCITRAL tribunal in Chevron v Ecuador has released its first partial award on the merits, holding in favour of the oil company. This is the first part of a multi-stage arbitration that disposes of claims for US$ 700 million, with claims in total amounting to US$ 27 billion to be eventually decided by the tribunal.

Chevron claimed that they had been manifestly denied justice by the Ecuadorian courts, in violation of the ‘access to justice’ provision of Art II(7) of the USA – Ecuador BIT.

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