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Chevron wins $96M award from EcuadorBy Megan R. Wilson - 08/04/15 12:45 PM EDT A federal appeals court on Tuesday upheld a ruling that handed Chevron a $96 million award from the Republic of Ecuador. The oil giant has been in a longtime battle with the country regarding a soured, decades old oil development deal between the two that led to a subsequent flurry of lawsuits.After the initial suit in Ecuador went unresolved in the country’s courts for about a decade, Chevron took the matter to an international tribunal, which ruled in the company’s favor. The ruling survived multiple challenges in the Netherlands, where the tribunal took place, in addition to the District Court for the District of Columbia. On Tuesday, a federal appeals court upheld the judgment.“Ecuador has given us no reason to conclude that these many authorities ruled in error, “ wrote Judge Robert Wilkins of the United States Court of Appeals for the District of Columbia.The main charge levied against the settlement was that Ecuador did not agree to resolve breach of contract issues through an arbitration system when it signed a settlement agreement with Chevron. Now five courts have said otherwise.Chevron, then serving as its predecessor Texaco Petroleum, entered into an agreement with Ecuador to develop oil fields in the country in exchange for providing it with cheap oil. The two made the agreement in 1973 and it was set to expire 1992 — but the to parties could not agree on terms for an extension. Chevron then filed several breach of contract lawsuits against Ecuador. While, in 1995, the two agreed on a settlement agreement to absolve all obligations between them, it ended up serving as a launching pad for the current ongoing lawsuits.Ecuador has also argued that its Bilateral Investment Treaty with the United States that went into effect in 1997 should not allow for the claims to be settled through arbitration since “Chevron and Ecuador had contractually agreed that Chevron’s claims would be litigated in Ecuadorian courts.”Court documents say Ecuador argued the international tribunal at The Hague “effectively usurped the jurisdictional authority of the Ecuadorian judiciary, the only adjudicative body authorized to hale the Republic into court to respond to Chevron’s lawsuits.” Judge Wilkins countered: “The Tribunal did not usurp the authority of the Ecuadorian judiciary; Ecuador ceded that authority, first by signing the BIT [Bilateral Investment Treaty], and then by failing to resolve Chevron’s legal actions in a timely fashion.”The treaty allows for “independent and neutral arbitrators to determine whether an investor company could take advantage of the substantive and procedural protections” in that deal, Wilkins said. By signing it, Ecuador agreed to allow the legal avenue within disputes.“Four courts have also considered and rejected Ecuador’s argument that Chevron did not have the right to avail itself of the BIT’s arbitration clause,” the judge continued. “Ecuador has given us no reason to conclude that these many authorities ruled in error.”
