* Chevron lost $18 bln pollution case in Ecuador court
* Chevron eyes on arbitrators after New York court setback
* If the case is heard, arbitration process may take years
By Braden Reddall
Nov 28 Arbitrators expect to rule as early as
next month on whether they can hear a dispute between Chevron
Corp and Ecuador related to a marathon pollution
liability case, according to a letter to the lawyers involved.
The tribunal, working under The Hague's Permanent Court of
Arbitration (PCA), ordered the Republic of Ecuador in February
to suspend enforcement of any judgment in the lawsuit filed by
rainforest dwellers against Chevron.
Chevron lost that case a few days later, as the company had
expected. A New York judge then sought to freeze the $18
billion judgment against the second-largest U.S. oil company,
before he was overruled on appeal.
Chevron, arguing the judicial process in Ecuador was
corrupted, is now banking on the arbitrators, who must first
decide whether they will become the latest body to weigh in on
what has become a landmark international legal battle.
"The current expectation is that the decision will be
issued in the course of late December 2011 or early January
2012," Martin Doe of the PCA wrote in a Nov. 11 letter, which
wound up in the filings of related U.S. lawsuits.
"If that goes our way, we can begin arguments on the
merits," a Chevron spokesman said on Monday.
The arbitration could then take years, if a previous
dispute with Ecuador is any guide. It took four years for a
separate international tribunal to rule Ecuador must pay
Chevron $96 million in connection with commercial claims made
in Ecuadorean courts in the early 1990s.
Chevron filed the latest arbitration case in September 2009
as part of a containment strategy for its anticipated defeat in
the Ecuador pollution litigation -- inherited when it bought
Texaco a decade ago.
The plaintiffs accused Texaco, which left the country in
1992, of dumping oil-drilling waste in unlined pits, polluting
the forest and causing illness and deaths among local people.
Yet Chevron says that, in 1998, Ecuador and state-owned
Petroecuador released Texaco from further liability after
Texaco's remediation work was done. Plaintiffs contend the
release did not deal with private claims against Chevron.
A lawyer for the Ecuadorean plaintiffs believes the
tribunal may not have the final word on enforcement of the
judgment, arguing in a legal journal late last year that there
was no basis to conclude an arbitral order in Chevron's favor
would have a "preclusive effect" on enforcement.
The tribunal was formed under the authority of a bilateral
U.S.-Ecuador investment treaty, which was signed on Aug. 27,
1993 -- just over two months before the Ecuadorean plaintiffs'
first case against Texaco began in New York.