Dutch High Court Finds for Chevron Over Ecuador

The Dutch national flag flies from a tour boat as liquid natural gas (LNG) silos stand on the shore at the Port of Rotterdam, Netherlands. Photo: Forbes

Readers of this column by now know the details of the effort to use fraudulent "lawfare" to extort billions from Chevron Corp., for pollution damages most likely caused by an Ecuadorean corporation long after Texaco Petroleum (which Chevron subsequently purchased) had left Ecuador and had obtained a formal certification that all pollution had been remediated. The fraud was masterminded by an American attorney and involved Ecuadorean lawyers and judges.

In 2009 Chevron and Texaco sought international arbitration against the Government of Ecuador, claiming that this fraud entailed violations of the United States-Ecuador Bilateral Investment Treaty (the “BIT”), the parties’ agreements, and international law. Chevron seeks ultimately to hold Ecuador financially accountable for the damages it has suffered in defending itself and its reputation.

Between 2012 and 2013, the BIT Tribunal issued five awards and orders in favor of Chevron. In January, 2014, Ecuador filed a petition in the District Court of the Hague (the legal seat of the BIT arbitration) to set aside the above-mentioned arbitral awards. On January 20, 2016, the District Court rejected all of Ecuador’s claims. In 2017 the Hague Court of Appeal upheld the District Court’s decision. And last week, on April 12, 2019, the Dutch Supreme Court upheld the Court of Appeal’s decision. Last week's decision means that the five arbitral awards are no longer subject to challenge. This includes the BIT Tribunal's interim awards ordering Ecuador to “take all measures necessary” to prevent or suspend enforcement of the Lago Agrio Judgment worldwide and declaring Ecuador in breach of international law for having failed to voluntarily do so.