Thursday, April 1, 2010

More on Chevron-Ecuador BIT arbitration

Via Opinio Juris, a quick update on my post below: Chevron have just been awarded damages of circa $700 million by an arbitral panel set up under the US-Ecuador BIT, on the basis that court delatys in rulings on commercial matters constituted a violation of the BIT by not providing an effective means of asserting claims and enforcing rights.

While this case appears to have largely concerned an issue of judicial, rather than administrative due process, it is not irrelevant from a GAL perspective - not least because Ecuador has rejected the finding of the arbitral panel; a course of action that is not, in international legal terms at least, really open to it. Chevron's own site (so perhaps not the least biased source around) notes that

Ecuador is defending the second largest arbitration docket in the world with more than 11 claims seeking more than US$6.5 billion in damages. Ecuador has withdrawn from the World Bank's arbitration program, making it the second country ever to do so, and has indicated its intention to cancel scores of bilateral investment treaties that provide for international arbitration of investment disputes.

It will be interesting to see whether this does indeed come to pass; and, if so, whether Ecuador will remain an outlier, or whether other developing countries may be tempted to challenge the network of bilateral treaties that have been developed to govern international investment.

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