Aug 172010

In late March, I posted a brief news update regarding the Ecuadorian government’s rejection of a $700 million arbitration award against the South American Nation.  The award stemmed from Chevron’s claim that Equador failed to pay for oil during the 1990′s.

In the meantime, things have gotten more interesting.

Chevron is a defendant in the Ecuadorian court for Texaco’s (now part of Chevron) alleged waste dumping in Equador.  The suit has been brought by Ecuadorian Indians, and Chevron claimed that “attorneys for the Ecuadorian plaintiffs… have been secretly colluding with the ostensibly neutral-court appointed expert… Richard Cabrera.”  (See CNN for more)

Chevron points to Joe Berlinger’s documentary “Crude” as evidence of fraud.  The documentary allegedly chronicles the case, and key Ecuadorian figures appear in the documentary, including Richard Cabrera.  A portion of the documentary’s outtakes can be found on YouTube.

Why is this so interesting to me?  Well, I was surprised that someone at Chevron noticed my post.

In response, Chevron representatives e-mailed me the following statement and link on August 3.  It describes Chevron’s request to preserve and obtain records from the documentary so that Chevron can investigate alleged fraud by the Ecuadorian government.

In a filing made late today with a U.S. federal court, Chevron has submitted outtakes from the movie Crude, documenting pervasive corruption and fraud on the part of the Lago Agrio plaintiffs’ lawyers. In the filing, Chevron is asking the court to order the preservation of all records so that the full extent of the fraud can be investigated.  We are also seeking to expand the scope of the information sought based on the revelations in the outtakes.  It is obvious that the plaintiffs’ lawyers and their associates have engaged in an illegal scheme to corrupt the proceedings in Ecuador.  The evidence submitted today shows beyond any doubt that there is no basis for an award of damages against Chevron, much less the fraudulent $27 billion assessment pending before the court in Ecuador.

The filing can be found here:

A federal judge ordered the filmmaker to turn over footage to Chevron.

More to come…

Mar 312010

A brief news update… Today the government of Ecuador rejected a $700 million dollar arbitration award Chevron obtained against the South American nation.

The Financial Times of London [registration required] reports:

An international arbitration tribunal in the Hague on Tuesday awarded Chevron, the US oil company, $700m in a claim against Ecuador stemming from allegations that the country failed to pay for millions of barrels of oil in the 1990s…

The arbitration panel found that Ecuador had violated the Treaty through “undue delay of the Ecuadorian courts,” thereby failing to provide effective means of asserting claims and enforcing rights.

It awarded Chevron approximately $700m in principal damages and interest, as of December 22 2006, pending further proceedings to determine applicable taxes, compound interest, and costs.

The ruling is a setback for Ecuador, which has pulled out of the World Bank’s arbitration programme – the second country ever to do so.

Chevron’s claims derive from a 2006 exchange between Texaco [now Chevron] and Ecuador under a US-Ecuadorian Investment Treaty, interpreted under UNCITRAL rules.

The judgment does not include Ecuadorian claims against Chevron for environmental damage.

Mar 162010

Alternative Dispute Resolution, specifically arbitration, is an extremely popular business practice; however, ADR can cause headaches in various international venues.

As western businesses have expanded to the United Arab Emirates, they have found arbitration difficult.  While the UAE has ratified the New York Convention, the Emirate’s court system is racing to catch up to standard international business practices.

More can be found at the Financial Times.

For more on arbitration in Dubai, see Raid Abu-Manneh’s brief 2009 article on whether Dubai is a Regional Arbitration Center, curtsey of Mayer Brown.