Chevron prevails in international arbitration against Republic of Ecuador

Client(s) Chevron Corporation

With valuable assistance from Jones Day, Chevron Corporation obtained a unanimous award on the merits by an international arbitration tribunal against the Republic of Ecuador in a PCA arbitration under the U.S.-Ecuador bilateral investment treaty. The tribunal found that an environmental lawsuit that had been filed against Chevron in Ecuador and the resulting $9.5 billion judgment issued against Chevron in the Ecuadorian courts had been marred by fraud and corruption by plaintiffs' legal team, including bribery of the presiding judge and ghostwriting of the judgment itself. The tribunal also found that Ecuador had breached its obligations under a 1995 settlement agreement releasing Texaco Petroleum Company (later an indirect subsidiary of Chevron, which has never operated in Ecuador) from the environmental claims on which the fraudulent Ecuadorian judgment was based. The tribunal held the judgment was unenforceable under international law and ordered Ecuador to "wipe out" enforceability of the judgment. Still pending is the tribunal's decision on the quantum of damages to be awarded to Chevron for the fees and costs incurred in the Ecuador litigation and related proceedings.

Chevron Corporation and Texaco Petroleum Company v. Republic of Ecuador