International tribunal awards Chevron $96 million in claim against Ecuador

Chevron Corp. has been awarded $96 million by an international tribunal in a claim against Ecuador related to past oil operations by Texaco Petroleum Co., now a Chevron subsidiary.

“This ruling confirms that Ecuador can be held accountable for its obligations under international law,” said Hewitt Pate, Chevron vice-president and general counsel.

“Chevron will continue to pursue enforcement of the agreements entered into by Ecuador and its state-owned oil company, Petroecuador, when they were members of a producing consortium with Texaco Petroleum,” Pate said.

The tribunal, administered by the Permanent Court of Arbitration in The Hague, found that Ecuador’s courts violated international law through their significant delays in ruling on certain commercial disputes between Texaco and the government of Ecuador.

The decision by the arbitration tribunal resolves seven commercial claims that Texaco filed in Ecuador between 1991 and 1993—cases which Ecuador’s courts continually delayed and refused to rule on.

The tribunal determined that the delays represented a violation of Ecuador’s obligation under its Bilateral Investment Treaty with the US to provide effective means for US investors in Ecuador to assert claims and enforce their rights.

Chevron said the final award takes into account taxes, compound interest, and costs associated with the preliminary award announced in March 2010.

Chevron and Texaco filed the international arbitration case in December 2006 under the Rules of the United Nations Commission on International Trade Law.

Earlier this year, Chevron took exception to what it called an “adverse judgment” from the Provincial Court of Justice of Sucumbios in Lago Agrio, Ecuador, in an environmental lawsuit involving Texaco.

“The Ecuadorian court's judgment is illegitimate and unenforceable,” Chevron said, adding that is the product of “fraud” and “contrary to the legitimate scientific evidence (OGJ Online, Feb. 14, 2011).”

Contact Eric Watkins at

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