Chevron Dodges Challenge to $96 Million Arbitration Award
A United States appeals court has rejected a challenge from the government of Ecuador to a $96 million international arbitration award in favor of Chevron Corp.
The decision, by the U.S. Court of Appeals for the District of Columbia Circuit, upholds a 2011 award from The Hague’s Permanent Court of Arbitration in The Netherlands. The case stemmed from a 1973 deal that called for Texaco Petroleum Co, which was acquired by Chevron in 2001, to develop oil fields in exchange for selling oil to the Ecuadorean government at below-market rates.
Chevron initiated an arbitration proceeding at The Hague in 2006, charging that Ecuador had violated provisions of a 1997 investment treaty with the U.S. “by failing to resolve the lawsuits in a timely fashion.”
The California-headquartered global oil and energy giant then filed a federal lawsuit in Washington, seeking a judgment confirming the panel’s decision in order to collect the award. After a federal district judge affirmed the award in 2013, Ecuador appealed to the D.C. Circuit Court of Appeals.
In a statement, a Chevron spokesman said the company was “pleased” and stated the award could reach $106 million, including interest.