An international tribunal overturned a $9.5 billion Ecuadorian judgement against Chevron Corp. related to the environmental remediation of a former concession area in the country, the U.S. oil major announced Sept. 7.
The tribunal's 500-page award echoes decisions by courts in the U.S., Argentina, Brazil, Canada and Gibraltar, and "as a matter of international law," absolves Chevron from complying with the Ecuadorian judgement.
The tribunal, administered by the Permanent Court of Arbitration in The Hague, through a unanimous decision held that Ecuador won the 2011 judgement through fraud, bribery and corruption based on claims previously settled and released by the Republic of Ecuador through a 1995 settlement agreement.
Through that agreement, Texaco Petroleum Co., known as TexPet, spent roughly $40 million on environmental remediation in the former concession area, leaving the remaining work to state-owned Empresa Publica de Hidrocarburos del Ecuador, known as Petroecuador.
Chevron acquired TexPet through its 2001 acquisition of Texaco. The indirect subsidiary was a minority partner in an oil production consortium in Ecuador from 1964 to 1992. Petroecuador took over TexPet's share of the consortium's oil operations in 1992.
The tribunal's award cites sworn testimony of Ecuadorian officials that TexPet's "technical work and environmental work was done well," while Petroecuador "had done absolutely nothing" over the life of the project while receiving 97.3% of the project's oil production revenues.