International Arbitration Panel Orders Ecuador to Take “All Measures Necessary” To Suspend Enforcement of the Lago Agrio Judgment
SAN RAMON, Calif., February 17, 2012 – Yesterday an international arbitration tribunal issued a Second Interim Award ordering Ecuador to prevent enforcement and recognition of the $18.2 billion Lago Agrio judgment, both within and without Ecuador. The 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, is considering the claims of Chevron Corporation (NYSE: CVX) and TexPet (a Chevron subsidiary) that Ecuador has breached its obligations under the BIT and international law through the Lago Agrio litigation, the resulting judgment, and the appellate decision upholding the judgment.
"Both Chevron and the Republic of Ecuador benefit from today's award, which upholds the rule of law and prevents enforcement of the fraudulent Lago Agrio judgment. Chevron welcomes the constructive steps that Ecuador has recently taken, such as the announcement that Petroecuador will remediate sites impacted by oil production and the acknowledgement that the tribunal's Award applies to all branches of the Ecuadorian State," said Hewitt Pate, Chevron vice president and general counsel. "We will continue to seek opportunities for constructive discussion with the Republic of Ecuador to resolve this pending BIT arbitration. Rejecting the fraudulent claims and misconduct of the corrupt American plaintiffs' lawyers is the best way to end the harm they are causing to the people and reputation of Ecuador."
The Second Interim Award directs the Republic of Ecuador, including "its judicial, legislative, or executive branches" to "take all measures necessary to suspend or cause to be suspended the enforcement and recognition within and without Ecuador" of the Lago Agrio judgment. In particular, the tribunal states that these measures must "preclude any certification" by Ecuador or its courts that would cause the judgment to become enforceable (referring to a procedural step in Ecuador in which a party must obtain a certification from the courts in order to enforce a judgment). Yesterday's Award is "immediately final and binding" on the parties and Chevron will promptly post a $50 million bond required by the tribunal. The Award expands on the tribunal's prior Interim Measures Order dated February 9, 2011 and First Interim Award dated January 25, 2012, which remain in effect.
The tribunal's Second Interim Award can be accessed at www.chevron.com/ecuador.
Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; 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.
Posted: February 18, 2012