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September 29, 2014

Dutch Supreme Court: Ecuador Owes Chevron $106 Million

The Dutch Supreme Court has upheld an appellate court judgment “rejecting Ecuador’s attempt to escape a $106 million arbitration award against it in its fight with Chevron.”

The court found that Ecuador’s 1997 U.S.-Ecuador Bilateral Investment Treaty with the United States prevents the country from disputing the judgment. Because of that treaty, ruled the court, the arbitration “did not breach Ecuador’s sovereignty.”

This ruling upholds the result of arbitration proceedings in The Hague that stem from “Chevron’s oil extraction and exploitation concession agreement in the country, which Ecuador allegedly breached.” Texaco, which merged with Chevron in 2001, originally filed the suits in Ecuadorean courts in the 1990’s alleging that “Ecuador took a portion of the crude oil supplied at below-market price from Texaco and sold it on the international market.” Ecuadorian courts, however, refused to hear the claims, so Chevron sought international arbitration in 2006.

The arbitration proceedings resulted in a $106 million judgment against Ecuador “with post-award interest.”

Ecuador sued in Dutch courts to overturn the decision, but that suit was dismissed in district and appellate court. The Supreme Court’s ruling upholds those dismissals.

“This decision marks the end of the republic’s efforts to set aside the award, which a U.S. federal court in Washington, D.C., also has separately confirmed in the form of a judgment enforceable in the United States,” Chevron said.

Read the full story here.

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