Republic of Ecuador v. Chevron Corporation

Order on Republic of Ecuador's Motion to Stay of Arbitration

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Although the Second Circuit affirmed the decision below, the Court found against Chevron on several key factual issues that undermine the company's defenses both in Ecuador and potentially in various enforcement courts where it faces an $18 billion liability.

“First, the panel found that Chevron's promises several years ago to a U.S. federal court that it would submit to Ecuadorian jurisdiction and pay damages are "enforceable" against Chevron. Second, the panel found that Chevron is the same company as Texaco and therefore is responsible for any misconduct committed in Ecuador by Texaco, despite Chevron's fallacious arguments to the contrary. Third, the panel found that the Lago Agrio litigation in Ecuador is the same as the original lawsuit filed in New York federal court in 1993, thereby nullifying Chevron's argument that it is not bound by the Ecuador judgment because the cases are different. The court found: "Chevron's contention that the Lago Agrio litigation (in Ecuador) is not the refiled Aguinda action (from U.S. federal court) is without merit." (F. 5, p. 7). Finally, the panel expressly confirmed that the environmental claims of the Ecuador plaintiffs cannot be resolved via international arbitration where they are not a party -- thereby striking a blow against Chevron's public claim that arbitration protects it from enforcement of the Ecuador judgment.” (Statement of Karen Hinton, spokesperson for the Republic of Ecuador)

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Published In: Alternative Dispute Resolution (ADR) Updates, Business Torts Updates, Indigenous Peoples Updates, International Trade Updates, Toxic Torts Updates

Reference Info:Decision | Federal, 2nd Circuit, New York | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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