Criticisms of the Chevron/Ecuador BIT Arbitration

Third-Party Letters Criticizing the BIT Arbitration

Several letters were made public in recent days criticizing the arbitration between Ecuador and Chevron under the US/Ecuador bilateral investment treaty.

Here are the letters I’m aware of.

Letters Addressed to Secretary-General Ban

  • Letter from José Daniel Amado. Mr. Amado is a Peruvian lawyer.
  • Letter from the Comisión Andina de Juristas. The Commission is an organization dedicated to “the defense of democracy and human rights in the region.”

Letter Addressed to the Secretary of UNCITRAL

  • Letter from Law Professors. The letter is signed by Professor Donald K. Anton of the Australian National University College of Law (and author of the excellent Anton’s Weekly Digest of International Law), Professor Naomi Roht-Arriaza of UC Hastings, Professor Jorge Avendano, of the Pontificia Universidad Católica del Peru, Professor Timo Koivurova of the University of Lapland, and Professor Cesare Romano of Loyola Law School Los Angeles.

It seems to me that these letters must be aimed at future reform and not at affecting the Chevron/Ecuador arbitration directly, though of course the letters may have an effect to the extent the arbitrators read them and are persuaded. The arbitral tribunal is an ad hoc tribunal making use of the UNCITRAL Arbitration Rules (N.B. this link is to the 2010 version of the Rules—I don’t know which version governs the Chevron/Ecuador arbitration). UNCITRAL publishes the rules, but the arbitration is not being conducted under UNCITRAL auspices, and I don’t see that UNCITRAL or even the United Nations has a role to play in administering the arbitration. This seems clear from the relief the letters seek. The Amado letter requests that

this letter be referred to all relevant entities within the UN structure and action taken to avoid the usurpation of sovereignty and human rights by decisions of BIT investment arbitration panels.

The Andean Commission letter contains an identical request. The law professors’ letter is perhaps the clearest on this point:

For the above reasons, and in light of the forthcoming session of Working Group II (Arbitration and Conciliation) concerning treaty-based investor-State relations, the undersigned respectfully call upon the Secretariat to ensure that UNCITRAL takes due note of the present situation and further evaluates the above-mentioned proceeding under its Arbitration Rules in order to make sure that it is not used improperly in contravention of international law.

UNCITRAL Documents

Working Group II of UNCITRAL, focusing on arbitration and conciliation, held a meeting in New York from February 6 to 10. This is the meeting referenced in the law professors’ letter. The meeting evidently focused on steps that could be taken to make BIT arbitrations more transparent. Here are some links to relevant documents concerning the meeting.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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