International court rules in favour of Chevron in Ecuador pollution case

The District Court of The Hague has ruled in favour of the US-based Chevron in its legal battle with Ecuador, which sought to nullify several arbitration awards handed down against the country in connection with a long-running dispute over alleged drilling pollution in the Amazon rain forest.

Chevron said that the tribunal, convened under the authority of the US-Ecuador Bilateral Investment Treaty (BIT) issued various awards and orders in favour of the company since 2009.

The tribunal is administered by the Permanent Court of Arbitration in the Netherlands.

When the Republic of Ecuador argued before the Dutch Court that the tribunal awards violated public policy, the court found that "none of the grounds for setting aside the arbitral awards put forward by Ecuador hit their mark."

The court issued an opinion affirming the tribunal’s assessment of its own jurisdiction under the text of the BIT.

Hailing the court’s ruling, Chevron said: "Today’s decision reinforces the integrity of the arbitral proceedings and ensures that Ecuador will be held accountable for violations of its international commitments.

"We look forward to the tribunal’s final award on the merits, which should hold Ecuador responsible for the multiple frauds committed against Chevron throughout the Lago Agrio case."

On 23 September 2009, Chevron filed the international arbitration claim against the government of Ecuador.

On 20 March 2012, the company amended its claim asserting denial of justice and other violations of Ecuador’s obligations under the BIT, investment agreements, and international law.

This includes Ecuador’s breach of the environmental settlement agreement with Chevron’s subsidiary TexPet, which participated until 1992 as a minority member of a consortium that produced oil under contracts with Ecuador and Ecuador’s government-owned oil company, Petroecuador.

Chevron seeks to hold Ecuador accountable for the breach of the settlement agreement through the arbitration.

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Image: Chevron Corporation headquarters in San Ramon, California. Photo: courtesy of Coolcaesar