Chevron Seeks Confirmation of its Arbitral Award Against Ecuador

In May 2012, I noted that a Dutch court had refused to vacate a $96 million arbitral award Chevron had obtained against Ecuador on its 2006 claims that Ecuador violated the US/Ecuador BIT. Now Chevron has moved to confirm the award in the District of Columbia. Aside from the fact of the complaint, there is not much to report—if there is any point of interest in the complaint, it comes from the fact that the US and Ecuador are both parties to both the New York Convention and the Panama Convention. The complaint seems to indicate that Chevron has a preference for proceeding as though the New York Convention applies, but FAA § 305 suggests that the Panama Convention may instead apply:

When the requirements for application of both the Inter-American Convention and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, are met, determination as to which Convention applies shall, unless otherwise expressly agreed, be made as follows:
(1) If a majority of the parties to the arbitration agreement are citizens of a State or States that have ratified or acceded to the Inter-American Convention and are member States of the Organization of American States, the Inter-American Convention shall apply.
(2) In all other cases the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, shall apply.

No doubt Chevron has a reason for its view, but on the face of the statute and in light of the dicta in Republic of Ecuador v. ChevronTexaco Corp., 376 F. Supp. 2d 334, 353-54 (S.D.N.Y. 2005) (Sand, J.), 1 I am curious what its reasons can be. Is it that Ecuador, itself a state, is not a citizen of Ecuador for purposes of § 305? We will have to wait and see whether this becomes an issue.

Notes:

  1. “Strictly speaking, this is probably not a case covered by the New York Convention. The United States and Ecuador are both members of the Organization of American States and parties to the Inter-American Convention, so that a majority of the parties are citizens of a State or States that have ratified or acceded to the Inter-American Convention and are member States of the Organization of American States, and thus that Convention rather than the New York Convention appears to apply” (citations and internal quotation marks omitted).

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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