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7 years ago
UPDATE 2-Chevron wins an Ecuador claim, awaits major ruling
March 30, 2010 / 10:40 PM / 7 years ago

UPDATE 2-Chevron wins an Ecuador claim, awaits major ruling

3 Min Read

* Separate from arbitration claim on environmental damages

* Chevron wins $700 mln in ruling by arbitration panel

* Shares up more than 0.5 pct in after-hours trading (Adds detail on ruling, quote, background, byline)

By Braden Reddall

SAN FRANCISCO, March 30 (Reuters) - Chevron Corp (CVX.N) won a three-year-old arbitration fight against Ecuador over a commercial dispute as it battles the country separately over an environmental claim that may result in $27 billion in damages against the company.

An arbitration panel ruled on Tuesday that Ecuador's courts violated international law by delaying rulings on commercial disputes between the U.S. oil company and Ecuador's government, and awarded Chevron $700 million.

The arbitration panel partially resolved seven claims that Texaco, bought by Chevron in 2001, filed in Ecuador from 1991 to 1993, Chevron said. The panel found that the courts had breached a U.S.-Ecuador treaty by not ruling on the cases.

It is the same treaty that Chevron is citing in its arbitration claim filed in September over alleged interference by the government in a blockbuster case brought by indigenous Ecuadoreans who accuse Texaco of damaging the environment and their health through its operations there. [ID:nN23418073]

With a ruling by the Ecuadorean judge on that case expected at some point this year, lawyers for the plaintiffs accused Chevron of forum shopping by bringing in the arbitrators.

Chevron has spent 17 years battling that claim, which a court expert has said could result in damages of up to $27 billion against the San Ramon, California-based company.

Both the plaintiffs and Chevron expect the court will rule against the company. Chevron vows to appeal any ruling that goes against it, arguing in part that Ecuador's courts are biased against the company.

In its ruling, the tribunal found that Ecuador violated the Bilateral Investment Treaty by not providing an effective means of asserting claims and enforcing rights.

"We have maintained for some time that Ecuador's courts are failing to administer justice when it comes to Chevron and its affiliates, and an international tribunal has now agreed," Chevron general counsel Hewitt Pate said in a statement.

Chevron filed the arbitration claim in December 2006, and the $700 million in damages is pending further proceedings to determine taxes, compound interest and costs.

Chevron shares rose more than 40 cents, or 0.5 percent, in extended trading in response to the ruling, after closing largely unchanged at $75.30 on the New York Stock Exchange. (Reporting by Braden Reddall; Additional reporting by Hugh Bronstein in Bogota; Editing by Toni Reinhold and Richard Chang)

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