Federal court rejects appeal to award $96 million to Chevron

On Aug. 4, a federal appeals court rejected a challenge from the Ecuadorian government to an award of $96 million to Chevron Corporation. Individuals in Maryland who follow the oil industry probably know that the energy giant has been in a dispute with the South American nation for decades over oil field development.

Texaco, which Chevron acquired later, made a deal in 1973 with the Ecuadorian government that allowed it to develop oil fields in the country as long as it sold oil at less than market price. In the 1990s, Texaco filed multiple lawsuits that claimed Ecuador violated the contract. Chevron began an arbitration proceeding in 2006 at The Hague’s Permanent Court of Arbitration, claiming that the courts in Ecuador did not to settle the legal actions in a timely manner, which was a breach of treaty between the two countries.

The Hague panel awarded $96 million to Chevron in 2011, and Chevron subsequently filed a suit in Washington, D.C., to confirm the decision so that it could receive the award. Ecuador appealed the affirmed judgment in 2013, but the U.S. Circuit Court of Appeals has upheld the ruling.

In a statement, the attorney general’s office of Ecuador said that it is reviewing the decision and assessing its options, which may include another appeal. The government has maintained that The Hague has no authority in the lawsuit because the bilateral trade agreement that Ecuador signed did not go into effect until 1997, after Texaco ceased operations in its country in 1992.

When a large company is sued or files a lawsuit against another entity, it may need a team of business litigation lawyers to represent its best interests in court. This team could use the services of private detectives and financial experts to gather evidence and strengthen the case.

Source: FOX Business, “Federal appeals court upholds $96M to Chevron in contract dispute with Ecuador,” Aug. 4, 2015

Source: Reuters, “UPDATE 2-U.S. court rejects Ecuador challenge to $96 mln Chevron award,” Joseph Ax, Aug. 4, 2015

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