International tribunal rules in favor of Chevron in Ecuador case

(Reuters) - Chevron Corp said on Friday an international tribunal ruled in its favor in an environmental dispute with Ecuador, finding the South American nation had violated its obligations under international treaties.

The logo of Chevron Corp is seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai

The tribunal unanimously held that a $9.5 billion pollution judgment by Ecuador’s Supreme Court against Chevron “was procured through fraud, bribery and corruption and was based on claims that had been already settled and released by the Republic of Ecuador years earlier.”

The decision adds to several court victories that Chevron has won against the plaintiffs and its legal team in the 2011 case. Texaco, which Chevron acquired in 2001, was released from liability through a settlement with Ecuador years earlier, the tribunal found.

Ecuador plans to appeal the tribunal’s ruling, challenging the decision in part on its findings of judicial fraud in the case, Inigo Salvador, Ecuador’s attorney general, said at a news conference on Friday.

“It worries us that the tribunal is asking a country to lift a sentence of one of its courts that was issued as part of a dispute between private parties,” said Salvador.

The tribunal, administered by the Permanent Court of Arbitration in The Hague, will next conduct a trial to determine the damages suffered by Chevron, a process that could take months.

Chevron estimated its damages and legal costs would run “hundreds of millions of dollars,” said spokesman Sean Comey.

“Ecuador had multiple opportunities to put an end to this liability,” said Comey, who said a failure to now accept the decision “will continue to accrue further damages.”

American lawyer Steven Donziger won an $18 billion judgment in 2011, representing villagers who blamed environmental contamination between 1964 and 1992 on Texaco, which Chevron bought in 2001.

The award was later reduced to $9.5 billion and in July Donziger was suspended from practicing law in New York by a state appeals court.

Chevron, which has said it never had any assets in Ecuador, has successfully fought efforts to enforce the judgment in Argentina, Brazil, Canada and the United States.

Reporting by Karan Nagarkatti in Bengaluru, Gary McWilliams in Houston and Alexandra Valencia in Quito; Editing by David Gregorio