The United States Supreme Court declined to hear an appeal lodged by the government of Ecuador that contested a $96 million arbitration settlement awarded to the American oil company Chevron.
Texaco, the company Chevron bought out in 2001, originally filed the suit against the Central American country for breaking from the terms of oilfield development contracts and international agreements.
In effect, the highest court in the U.S. upheld a ruling by the U.S. Court of Appeals for the District of Columbia Circuit, which favored Chevron in an arbitration deal issued by The Hague’s Permanent Council of Arbitration in the Netherlands.
There’s $106billion involved (emphasis added),
The arbitration process started in The Hague in 2006 with Texaco claiming that Ecuador’s court system failed to resolve disputes in a timely manner, as the nation had agreed to in a 1997 investment treaty with the U.¬S. government.
The panel awarded the multimillion-dollar settlement to Chevron, which prompted it to file a federal suit with the U.S. government in order to collect the amount of the award. The year 2013 saw the approval of the deal under the gavel of a federal judge, but Ecuador lodged an appeal soon after, arguing that the arbitration tribunal did not have jurisdiction over the case since Texaco had ceased operations in Ecuadorian oilfields in 1992—five years before the treaty at play.
The amount of the award now stands at $106 million after the calculation of interest, according to company spokesperson Morgan Crinklaw, who also said the oil and gas major was “pleased” that Ecuador would be held accountable.
On the one hand, Ecuador was saying that in this case “the arbitration tribunal did not have jurisdiction over the case since Texaco had ceased operations in Ecuadorian oilfields”. On the other hand, in a different case Ecuador claims Chevron is liable for damages even when Chevron never conducted oil production operations in the country.