Chevron awarded $96 million in Ecuador government dispute

An international tribunal ruled that Ecuador must pay Chevron Corp $96 million in connection with claims made in Ecuadorean courts in the early 1990s. The claims were unrelated to an $18 billion judgement rendered against Chevron by an Ecuadorean court earlier this year.
An international arbitration tribunal found on Wednesday that Ecuador's courts violated international law through their delays in ruling on commercial disputes between Texaco, which was bought by Chevron, and Ecuador's government. "This ruling confirms that Ecuador can be held accountable for its obligations under international law," Chevron's general counsel, Hewitt Pate, said in a statement.
"Since Ecuador's politicised court system has failed to provide impartial tribunals and due process, Chevron has had to seek international remedies," he added. The final award takes into account taxes, compound interest and costs associated with a preliminary award announced in March 2010.
Ecuador's ombudsman, Diego Garcia, said the country's government would try to nullify the ruling. "We'll start a legal action again against this ruling, which derives from powers that Ecuador has contested from the beginning," he told reporters.
The decision by the tribunal, administered by the Permanent Court of Arbitration (PCA) in The Hague, resolved seven claims Texaco filed in Ecuador between 1991 and 1993. The tribunal determined that the court delays violated Ecuador's obligation under a Bilateral Investment Treaty with the United States. That treaty was also the basis for a claim Chevron made about Ecuador's judicial independence in its long-running dispute over pollution in the country resulting from two decades of drilling there prior to Texaco's departure in 1992.
Arbitrators, working under the PCA, in February ordered Ecuador to suspend enforcement of any judgement related to that case - just days before a court in Lago Agrio issued its multibillion-dollar verdict against Chevron. In September, a US appeals court is expected to rule on a racketeering case brought by San Ramon, California-based Chevron against the Ecuadorean plaintiffs in the pollution litigation. The racketeering case is due to begin in New York in November.