Panel Protects Chevron in Ecuador Case

Feb. 17, 2012
Order buys company time to fight a judgment set against it last year in environmental case.

An arbitration panel in The Hague backed Chevron Corp.'s bid for temporary protection from a $9.5 billion Ecuador court judgment against the oil giant, documents showed Feb. 17.

The panel's order Feb. 16 buys Chevron time to fight the judgment set against it one year ago for environmental damage in the Ecuadoran jungle allegedly caused by Texaco, which Chevron acquired in 2001.

The panel ordered the Ecuadoran government to "take all measures necessary to suspend or cause to be suspended the enforcement and recognition within and without Ecuador" of the Feb. 14, 2011, judgment.

The decision will allow Chevron to pursue its case against the "Lago Agrio" judgment in the tribunal set up under the U.S.-Ecuador Bilateral Investment Treaty (BIT).

Chevron argues that Ecuador violated the treaty by taking the case to its domestic court.

"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," the company said in a statement.

"We will continue to seek opportunities for constructive discussion with the Republic of Ecuador to resolve this pending BIT arbitration."

Washington-based group Public Citizen, which campaigns to limit the power of corporations, said the tribunal's decision effectively "ordered the Ecuadoran government to interfere in the operations of Ecuador's independent court system on behalf of the oil giant."

After having lost the case, the group said, "Chevron turned to an ad hoc 'investor-state' tribunal of three private lawyers as the last chance to help the company avoid paying to clean up contamination in the Amazonian rainforest."

The group did not acknowledge however that Quito took part in the tribunal and had nominated one of its members.

The lawsuit on behalf of Ecuadoran Amazon communities in the Lago Agrio region dates back to the first complaint filed in New York in 1993.

It sought $27 billion for water and soil damage, as well as for illnesses suffered by local resident which they say resulted from Texaco's alleged dumping of billions of gallons of toxic waste into the Amazon between 1964 and 1990.

But the case has been tainted by claims and counterclaims of misconduct and corruption on both sides.

In 2009, Chevron posted videos online purporting to show a bribery scheme implicating the judge presiding over the lawsuit. The judge recused himself days after the videos were released.

Copyright Agence France-Presse, 2012

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