Chevron Wins Arbitration Claim Against the Government of Ecuador

[Derechos]

Source: Chevron press release

International Tribunal Awards Chevron Approximately $700 Million

SAN RAMON, Calif., Mar 30, 2010 (BUSINESS WIRE) --An international arbitration tribunal has ruled in favor of Chevron (NYSE:CVX) in a claim against Ecuador related to past oil operations by Chevron's subsidiary, Texaco Petroleum Company. The tribunal, administered by the Permanent Court of Arbitration in The Hague, found that Ecuador's courts violated international law through their delays in ruling on certain commercial disputes between Texaco Petroleum Company and the Ecuadorian government.

Today's ruling is distinct from arbitral claims Chevron and Texaco Petroleum filed against Ecuador in 2009 in connection with the Lago Agrio litigation.

In its decision, the tribunal found that Ecuador had violated the United States-Ecuador Bilateral Investment Treaty by failing to provide effective means of asserting claims and enforcing rights. As a result, the tribunal awarded Chevron and Texaco Petroleum Company approximately US$700 million in principal damages and interest as of December 22, 2006, pending further proceedings to determine applicable taxes, compound interest, and costs.

"This ruling demonstrates that the government of Ecuador is not above the law," said Hewitt Pate, Chevron vice president and general counsel. "We have maintained for some time that Ecuador's courts are failing to administer justice when it comes to Chevron and its affiliates, and an international tribunal has now agreed. We hope this ruling will help move Ecuador towards proper treatment of foreign investors and respect for the rule of law."

The arbitral award partially resolves seven commercial claims that Texaco Petroleum Company, now a Chevron subsidiary, filed in Ecuador between 1991 and 1993. Ecuadorian courts continually delayed and refused to rule on Texaco Petroleum's cases, which has been found to constitute a breach of Ecuador's treaty with the United States.

Chevron and Texaco Petroleum Company filed the arbitration in December 2006 under the Rules of the United Nations Commission on International Trade Law (UNCITRAL). The Permanent Court of Arbitration is an intergovernmental organization with over one hundred member countries established by international convention in 1899 to facilitate arbitration and other forms of dispute resolution. The United States acceded to the Court's founding convention in 1900 and Ecuador acceded in 1907.

The tribunal is not alone in highlighting the Ecuadorian courts' failure to provide justice to foreign investors. In February 2009, the United States Department of State released its Investment Climate Statement for Ecuador, which stated, "Systemic weakness and susceptibility to political or economic pressures in the rule of law constitute the most important problem faced by U.S. companies investing in or trading with Ecuador." The report went on to state, "corruption is a serious problem in Ecuador," and that, "the courts are often susceptible to outside pressure and bribes."

Ecuador is defending the second largest arbitration docket in the world with more than 11 claims seeking more than US$6.5 billion in damages. Ecuador has withdrawn from the World Bank's arbitration program, making it the second country ever to do so, and has indicated its intention to cancel scores of bilateral investment treaties that provide for international arbitration of investment disputes. The country has also fallen out of favor with international financial markets since defaulting on more than $3 billion of foreign debt after a government-appointed panel declared the debt to be "illegitimate."

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.


SOURCE: Chevron Corporation

Chevron CorporationKent Robertson, [e-mail]

http://investor.chevron.com/phoenix.zhtml?c=130102&p=irol-newsArticle&ID=1407948&highlight=

[Judi Lynn]

1. Wow. What a "triumph" for Chevron. Dirtballs. Criminals. They are living without consciences.

I hope they know what the world thinks of them, and their big "win" over the victims.

[roody]

2. sad

[Peace Patriot]

3. Poor little Chevron can't get "justice" in Ecuador. I'll tell you what "justice" for Chevron-Texaco

and Exxon Mobil would be: complete dismantling of the corporations and the seizure of their assets for the common good, plus investigation, prosecution and prison for executives found guilty of crimes including crimes against Nature and against human beings.

These fuckers have not only polluted the earth, in vast oil spills in Alaska (the Exxon-Valdez spill), Ecuador (worse than the Exxon-Valdez--commonly described as the "Rainforest Chernoybl"--Chevron-Texaco is the perp), and throughout the world, especially oceans and beaches worldwide; they have not only used their vast, accumulated wealth and power to pollute the air as well (lobbying for cars and freeways and against public transportation), to collude on price-fixing and price-gouging, including charging the Pentagon (and thus U.S. taxpayers) astronomical prices for military fuel, to fund climate change denial and prevent regulation, and to addict humanity to global tanker trade and to war, they instigated a horrible war on Iraq, colluding on the slaughter of a million innocent people, all told; they hijacked the U.S. military for corporate resource wars. They were among the entities at Dick Cheney's secret energy meetings in spring 2001, planning the invasion of Iraq before 9/11. Of all the corporate rulers, they are the worst, with the possible exception of ES&S, which just bought out Diebold and now has an 85% monopoly of U.S. 'TRADE SECRET' voting systems. (ES&S has far rightwing ties that are even scarier than Diebold's. Destroying democracy disables the Peoples' ability to prevent pollution and thus is worse than the pollution).

These corporations deserve "justice" all right--but not the "bought and paid for" bullshit of European courts and the U.S. State Department. They deserve REAL justice imposed by the sovereign people of the United States--if we can ever wrest our sovereignty back from them--and the sovereign people of Ecuador, who have fought so hard to restore their sovereignty, and the sovereign people of every nation that has been harmed by these multinational monsters.

This case requires investigation--and I hope to God that someone with the resources to do it is on the investigative trail, because this case stinks like the pools of toxic waste that Chevron-Texaco left in the Ecuadoran Amazon still stinking up and destroying the forest, the water and the fisheries and sickening human beings thirty years later, in a area the size of Rhode Island. THAT case--brought by 30,000 Indigenous tribespeople--is likely to go against Chevron-Texaco, and soon. Chevron-Texaco agreed to the case being remanded to Ecuadoran courts (from U.S. courts) when they had corrupt control of the Ecuadoran government. Now they don't. And I think these two cases are related--this one representing Chevron-Texaco's untoward power at the Arbitration court in Europe, and the other one representing the triumph of democracy, and of the sovereignty of the people, in Ecuador. This Chevron-Texaco win is meant to mitigate and/or influence the other case--to 'balance' their losses and/or to intimidate the Ecuadoran court.

Two other things:

1) As with the Exxon Mobil lawsuit against Venezuela--by which they are trying to seize $12 billion of Venezuela's assets, in order to punish the Chavez government for its assertions of Venezuela's sovereignty and insistence on a fair deal for Venezuela in the oil contracts--this Chevron-Texaco legal action against Ecuador is, quite literally, taking food out of the mouths of poor children and books out of their hands, and is consigning the elderly poor to death. Both Venezuela and Ecuador are using their profits from the oil to benefit the poor! The richest corporate entities on earth are trying to punish, harm, starve and kill the people who own the oil! They might as well bomb them to death, as in Iraq. The effect is the same--to take ALL the profits by disregarding human life.

2) This ruling by the Arbitration court is POLITICAL--it is part of a U.S./U.K.-European campaign of slander, destabilization, "dirty tricks" and worse against the most democratic governments of South America. It is PUNISHMENT for leftist governments giving the finger to the World Bank/IMF loan sharks and to U.S./U.K.-European banksters and other corporate exploiters, and I suspect is tied to the Pentagon's war plan for grabbing Venezuela's and also Ecuador's oil--the two oil rich countries adjacent to Colombia, which the Pentagon is now occupying (by means of a recent military agreement granting the U.S. military use of SEVEN military bases in Colombia, use of ALL civilian airports and other infrastructure, and total diplomatic immunity for U.S. soldiers and U.S. 'contractors' in Colombia, for a ten year period with escalation and renewal clauses--combined with the Pentagon's placement of other war assets--the U.S. 4th Fleet and additional military bases surrounding Venezuela's northern oil coast and oil provinces). And it is specifically punishment of Ecuador for throwing the U.S. military/Dyncorp out of Ecuador last year.

[Bacchus39]

4. so why not pursue the case in Ecuadorian courts??? n/t

s

[protocol rv]

7. Sorry to rub it in....

But I told you so. And the ruling isn't political. The evidence was clear, the Ecuadorians had very little to claim. However, those indians do have a claim against the Ecuadorian government. But when an indian's rights are violated in the Western Hemisphere, nothing much happens.

[protocol rv]

8. The Exxon Mobil Case agaisnt PDVSA

The Exxon Mobil case isnt' "punishment", it's a simple move to recover money ExxonMobil lost when the Venezuelan government and PDVSA took its property. When Exxon Mobil invested its money in Cerro Negro, it did so expecting to have something called "profits". When a person grows rabbits by feeding them grass, it expects to sell the rabbits at a profit. ExxonMobil happens to do this in a giant scale - it grows "oil" and expects "profits". And this is a reasonable expectation. Which means ExxonMobil will win its case and hammer a very large nail on Rafael Ramirez' forehead (I expect the award to Exxon Mobil will be about $2.5 billion USD plus interest, or about $3 billion - if PDVSA is lucky).


This doesn't have much to do with the US fleet, or politics, or slander. When a party to a contract breaks the contract, and the injured party has recourse to a court, the likely outcome is an award to the plaintiff. This should teach Chavez a lesson, because the court award will be timed to hit them when they need Citgo the most - and it's evident Exxon Mobil and Conoco Phillips will end up with Citgo.

[Judi Lynn]

5. Ecuador rejects ruling awarding $700M to Chevron

Ecuador rejects ruling awarding $700M to Chevron
March 31, 2010 2:05 PM ET

QUITO, Ecuador (AP) - Ecuadorean officials are rejecting an international arbitration tribunal's ruling that it violated international law and must pay $700 million to the Chevron Corp.

President Rafael Correa's administration is analyzing options for appeal under national and international law, Attorney General Diego Garcia said in a statement Wednesday.

"This new effort to compromise the Ecuadorean state in its firm commitment to respect the independence of its judicial system ... will not succeed," Garcia said.

Chevron announced the tribunal's decision on Tuesday, saying the arbitration panel decided that Ecuador's courts violated international law by delaying rulings on certain disputes between the company and the Ecuadorean government.

The award partially resolves seven commercial claims that Texaco, which is now a Chevron unit, made in Ecuador from 1991 to 1993 alleging that the government was selling company oil intended for domestic use in international markets. Texaco was acquired by the San Ramon, California-based Chevron Corp. in 2001.

The ruling announced Tuesday is not related to and does not affect claims against Chevron by residents of the Amazon jungle in Ecuador. They are seeking $27 billion in damages for rain-forest pollution allegedly caused by oil-drilling operations.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20100331&id=11352008

[Peace Patriot]

6. The ruling 'is not related to and does not affect claims against Chevron by residents of the Amazon'

Yeah, right.

-----

Full quote: "The ruling announced Tuesday is not related to and does not affect claims against Chevron by residents of the Amazon jungle in Ecuador. They are seeking $27 billion in damages for rain-forest pollution allegedly caused by oil-drilling operations." (Emphasis added.)

Like hell it isn't "related to" it--and let's hope that it does NOT intimidate the Ecuadoran court, which has already been subjected to Chevron-Texaco dirty tricks.