DANIEL BEHN

PLURICOURTS

UNIVERSITY

OF OSLO

THE CHEVRON-ECUADOR SAGA

COMPLEXITIES IN THE

SETTLEMENT OF INTERNATIONAL

DISPUTES

Texaco’s Operations in Ecuador

The Original Lawsuit in US Courts

The Case in Ecuadorian Courts

The RICO Case in US Courts

The Enforcement Cases

The Bilateral Investment Treaty Tribunals

OUTLINE

OIL PITS IN ECUADOR

Indigenous communities in Northern Ecuador claim that over the course

of many decades, Texaco dumped millions of barrels of produced water

into thousands of above ground pits.

They claim the environmental pollution is heavy in cancer-causing

polycyclic aromatic hydrocarbons (PAHs) and that the oil responsible for

contamination of the regional water supply.

The original lawsuit claims that this soil and water contamination has led

to a pronounced increase in illness among the local population and that

the responsible party is Texaco (now Chevron).

THE NATURE OF THE DISPUTE

Chevron, who acquired Texaco in 2001, claims that there is no causal link

between the rise in illness and the contamination from the oil pits.

They claim that they are not liable for environmental damage because of

a release agreement that Texaco signed with Ecuador in 1995 that

required Texaco to spend about 45 million USD on remediation work.

They claim that, even if they were liable for the environmental damage,

the only party with standing to sue them is the state of Ecuador and not its

citizens.

THE NATURE OF THE DISPUTE

1964 Texaco begins exploration in the Oriente region

of Ecuador

1966 Texaco becomes operator of oil consortium

through a 25 year concession

1976 PetroEcuador becomes majority owner of

consortium

1992 Texaco ceases all operations in Ecuador

1993 Lago Agrio plaintiffs (LAPs) file environmental

tort suit against Texaco in New York

Aguinda v. Chevron (SDNY)

A BASIC TIMELINE

1995 Texaco signs environmental remediation

agreement with Ecuador and PetroEcuador

1996 Ecuador intervenes as Amicus in US

litigation claiming that only the government

has the right to sue Texaco

1997 US and Ecuador sign Bilateral Investment

Treaty (BIT)

1998 Texaco completes remediation work valued

at approximately 45 million USD

1999 Ecuador passes Environmental

Management Act granting private right of

action for environmental torts

2001 Chevron acquires Texaco

2001 After many years of motions, the US Second

Circuit Court of Appeals dismisses case on

forum non conveniens grounds

2003 LAPs file suit in Sucumbíos region of Ecuador

Aguinda v. Chevron (Sucumbíos Court)

2007 Rafael Correa elected President of Ecuador

2009 Chevron goes on the offensive

‘We will fight until hell freezes over and

then fight it out on the ice.’

2009 Chevron files BIT arbitration against Ecuador

claiming denial of justice

Chevron v. Ecuador (PCA Arbitration)

2010 Chevron launches discovery motions in multiple

jurisdictions

Discovery from Berlinger (2d Cir.)

Discovery from Bonifaz (D. Mass.)

Discovery from UBR (3d Cir.)

Discovery from Espinosa (D.D.C.)

Discovery from ELAW (D. Ore.)

Discovery from Rourke & Picone (D. Md.)

Discovery from Shefftz (D. Mass.)

Discovery from Kohn (3d Cir.)

Discovery from Bjorn Bjorkman (D. Colo)

Discovery from Douglas Mackay (E.D. Cal.)

Discovery from Kelsh (N.D. Cal)

Discovery from Amazon Defense Fund (S.D. Fla.)

Discovery from Patton Boggs (SDNY)

2010 Ecuador and LAPs asks US courts to stay BIT

arbitration

Ecuador v. Chevron (SDNY)

2011 Chevron files RICO claim and anti-enforcement

claim against Donziger and LAPs in New York

Chevron v. Donziger (SDNY)

2011 Ecuador Provincial Court (Judge Zambrano)

issues 18.2 billion USD judgment against

Chevron

8.6 billion + 8.6 billion + 860 million

2011 Ecuador Appeals Court affirms judgment

2011 New York District Court (Judge Kaplan) grants

preliminary injunction against enforcement of

Ecuador judgment

Chevron v. Naranjo (SDNY)

2012 US Second Circuit Court of Appeals vacates

injunction

2012 Chevron files writ of certiorari to US Supreme

Court

2012 US Supreme Court denies certiorari

2012 Chevron petitions Ecuador Supreme Court

2012 Ecuador refuses to exempt Chevron from bond

requirement

2012 District Court of the Hague refuses to vacate

Chevron’s 2006 BIT Award for 96 million USD

2012 Ecuador brings claim against US over

interpretation of BIT

Ecuador v. US (PCA Arbitration)

2012 New York District Court denies partial summary

judgment in RICO case

Chevron v. Donziger (SDNY)

2012 Ecuador Provincial Court increases judgment

to 19.02 billion USD for plaintiffs attorneys fees

2012 LAPs file petition with Inter-American Court of

Human Rights ‘There is an irony here. The Ecuadorans have firmly rejected

the idea that the arbitral tribunal has the authority to boss

Ecuador around. But they are now asking the Inter-American

Commission to boss Ecuador around! Perhaps the view is

that the Inter-American Commission on Human Rights has

more legitimacy than the arbitral tribunal? It’s not immediately

clear to me why this should be so, since in both cases

Ecuador’s submission to jurisdiction arises out of its own

treaty commitments.’

2012 Ecuadorian Appeals Court refuses to block

enforcement of judgment as per BIT tribunal

First, Second, and Third Interim Measure Orders

(Chevron v. Ecuador)

2012 LAPs terminate Inter-American Court of Human

Rights proceedings

2012 LAPs seek enforcement in Brazil, Canada, and

Argentina

Yaiguaje v. Chevron – May 1, 2013 stay

of proceedings

Salazar v. Chevron – still pending

Aguinda v. Chevron (Argentina) – assets

frozen but unfrozen after appellate

decision on June 4, 2013

2 Montevideo Conventions

Inter-American Convention on Execution

of Preventive Measures

Inter American Convention on the

Extraterritorial Efficacy of Judicial

Decisions and Foreign Arbitral Awards

2012 Patton Boggs sues Chevron for tortious

interference of contract

Patton Boggs v. Chevron (DCC)

2012 Some LAPs (the Huaorani) sue Donziger in US

Courts asking for declaratory relief

Huani v. Donziger (SDNY)

2012 Judge Zambrano Dismissed from the bench

2013 Third party funding details emerge -- at least 12

funders

2013 Chevron moves to assert claims against Patton

Boggs

2013 US court confirms 2006 arbitral award against Ecuador

2013 LAPs seek to attach 2006 BIT award in Ecuador

2013 SEC filing by Chevron Shareholders

2013 Andean Trade Preferences Act

‘failed to act in good faith in recognizing as binding or in enforcing arbitral awards in favor of United States citizens … which have been made by arbitrators appointed for each case or by permanent arbitral bodies to which the parties involved have submitted their dispute.’

2013 New discovery in RICO case shows complex bribery scheme by Chevron in Ecuador – Zambrano will testify in RICO trial on behalf of Donziger and LAPs.

2013 BIT arbitration issues fourth interim award

2013 Chevron denied partial summary judgment for

the third time

2013 Chevron attempts to bifurcate RICO case

between Donziger and LAP plaintiffs – motion

denied

2013 Chevron asks for bench trial

2013 Second Circuit hears petition to remove

Judge Kaplan from RICO case – Petition

denied

2013 RICO trial starts in mid-October

2013 Ecuador Supreme Court upholds main award

but cuts out punitive damages