Tribunal supports Chevron in Ecuador case

An international tribunal has determined that agreements signed by the government of Ecuador in 1995 and 1998 released Texaco Petroleum Co., now part of Chevron Corp., from environmental liability for land on which it once produced oil.

The ruling upholds an important claim Chevron has made in its years-long defense against a lawsuit claiming billions of dollars for environmental damage (OGJ Online, Feb. 14, 2011).

Texaco produced oil in Ecuador as part of a consortium under a concession that ended in 1992. It operated the group until replaced by the state-owned oil company in 1990. Chevron, which acquired Texaco in 2001, says the company spent $40 million on environmental remediation and was released from further liability. Chevron also argues the environmental damage for which Texaco is blamed occurred after the state company took control of the fields.

The Permanent Court of Arbitration at The Hague earlier ordered a court in Ecuador not to enforce a judgment against Chevron, which claims fraud in the case.

“The game is up,” declared Hewitt Pate, Chevron vice-president and general counsel, after the latest ruling by the tribunal. He said the partial award “confirms that the fraudulent claims against Chevron should not have been brought in the first place.”

An arbitration hearing on alleged collusion between the Ecuadorian courts and plaintiffs and their lawyers is scheduled next January.

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