Dutch Supreme Court Rules Ecuador Must Pay Chevron US$106 Million

EspañolOn Friday, September 26, the Dutch Supreme Court upheld a decision against the Republic of Ecuador that requires the country to pay US$106 million to the oil company Chevron.

The ruling upholds the results of an arbitration proceeding in the Hague originating from Ecuador’s alleged breach of an oil extraction and exploitation concession agreement in the country.

Dutch Court of Appeals upheld ruling in favor of Chevron. Republic of Ecuador will have to pay about $106 million.

“Chevron Corporation is pleased by the decision in its favor and in favor of one of its subsidiaries, and that the Dutch Supreme Court rejected Ecuador’s attempts to annul the arbitration award against it for US$106 million,” the company announced.

The conflict between Ecuador and Chevron began in the early 1990s, when the oil company brought seven cases against Ecuador for not complying with its concession contracts. In response to these allegations, Ecuador accused the multinational oil company of contaminating many of their exploration zones.

Chevron contends that the case brought forth by Ecuador did not allow the company due process of law.

“After more than a decade, the Ecuadorian courts refused to make a decision about the Texpet claims. Chevron and Texpet brought an investment arbitration against Ecuador at the end of 2006, alleging contract violations of customary international law and the Bilateral Investment Treaty (BIT) between the United States and Ecuador,” explained the company in an official statement.

As a result, Chevron brought its case to Dutch courts, alleging the BIT should protect its investments, and that the Ecuadorian judiciary refused to act.

“Whether or not the commercial arbitration is related to the fraudulent decision made multiple times by the Ecuadorian courts against Chevron, this decision confirms that Chevron has the power, by virtue of international law, to protect itself against Ecuador’s action and inaction under Ecuadorian judicial power,” explained Chevron.

The government of Ecuador previously stated it would accept the results of the Dutch court’s decision.

The Republic of Ecuador has agreed in writing to Chevron, to fulfill this award if the legal process is confirmed by the Dutch courts. There is no evidence, not even an attempt to overlook potential adverse award, if this is confirmed,” said Nathalie Cely, Ecuadorian ambassador to the United States, in a letter sent to Chevron’s commercial representative in Ecuador in September 2012.

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