Greenwire: Ecuador’s government announced yesterday it plans to appeal an international arbitration tribunal’s $700 million award in favor of Chevron Corp., which claimed the country did not pay for millions of barrels of oil after Chevron subsidiary Texaco Petroleum Co. sold its operations to a state-owned oil company.
The award was unrelated to an ongoing case in which Ecuadorean plaintiffs are asking Chevron to pay $27 billion for decades of environmental contamination. Though a trial in that case is under way in Ecuadorean court, a federal judge in New York ruled earlier this month that Chevron could pursue arbitration in The Hague (Greenwire, March 19).
Chevron sought to establish through the oil payments case that Ecuadorean courts have not administered justice in a fair and timely manner. Diego Garcia, Ecuador’s attorney general, issued a statement yesterday describing the case as part of “a well-orchestrated strategy by Chevron to evade its responsibilities ahead of the Ecuadorean courts’ eventual adverse decision for its possible responsibility in the destruction of the environment.”
The $700 million award in Chevron’s favor is about one-fifth of Ecuador’s $3.85 billion in international reserves as of March 26, according to the country’s central bank. If Ecuador were to pay the award, it could decrease by as much as 87 percent once the government accounts for back taxes related to oil contracts, Garcia said (Daniel Cancel, Bloomberg, March 31). – GN