October 10, 2012 / 8:57 PM / 7 years ago

Ecuador files appeal to $1.77 bln Occidental ruling

* Case relates to Ecuador’s takeover of Occidental assets

* Appeal argues World Bank body did not have jurisdiction

By Alexandra Valencia

QUITO, Oct 10 (Reuters) - Ecuador has filed an appeal to overturn a ruling that awarded $1.77 billion to U.S.-based Occidental Petroleum arguing that the World Bank’s arbitration body lacked jurisdiction over the case, the attorney general’s office said on Wednesday.

The International Center for Settlement of Investment Disputes (ICSID) on Friday ordered Ecuador to pay the hefty sum to Occidental, the fourth largest U.S. oil company, as a compensation for taking over its assets in 2006.

“The annulment request has already been filed before the ICSID,” a spokesman for the attorney general’s office told Reuters.

He said that Ecuador argued that the ICSID did not have jurisdiction in the case because the contract between Occidental and the Ecuadorean state did not name the body as the arena to solve differences.

Ecuadorean President Rafael Correa and the country’s attorney general Diego Garcia had said Ecuador planned to lodge an appeal.

It took more than six years for the ICSID to issue the original ruling since Occidental Petroleum, also known as Oxy, filed a request for arbitration in July 2006.

The attorney general’s office expects the appeal process to last between one and two years.

ICSID data shows that Oxy’s award was the largest ever arbitration ruling against Ecuador by the center.

The Ecuadorean government decided to terminate Occidental Petroleum’s contract in May 2006, arguing that the company had sold a stake in its operations without government consent.

Ecuador’s withdrawal from the ICSID in 2009 does not make the country exempt from the ruling because t he arbitration case w a s filed in 2006.

At the time, Occidental was Ecuador’s largest oil investor, extracting around 100,000 barrels of oil per day. The company’s operations are now controlled by state-run Petroamazonas.

Ecuador is OPEC’s smallest member and produces around 500,000 barrels of crude oil a day.

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