BIT Tribunal Rules for Chevron

Under the U.S.-Ecuador Bilateral Investment Treaty, Chevron (NYSE:CVX) instituted arbitration proceedings to seek recourse against Ecuador in The Hague, resulting in the BIT Tribunal issuing an order on February 9, 2011. Ecuador must take all measures at its disposal to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal.Further, the Tribunal stated that Ecuador would be responsible to Chevron for any losses resulting from any judgment by an Ecuadorian court in the Lago Agrio case that was a breach of an obligation owed to Chevron as a matter on international law, or any loss arising from the enforcement of such judgment (within and without Ecuador).

Chevron has asked that the Ecuadorian appellate court take all steps to suspend enforcement of the Lago Agrio judgment until further order of the Tribunal. The company also asked that any requirement that Chevron post a bond to prevent enforcement of the judgment during the cassation appeal be suspended. Ecuador’s international obligations would be violated if it made any demand that Chevron post a bond in this case, which it has no obligation to do.