See today’s post. The obvious speculation–either the Ecuadoran government threatened him or it paid him off. I can’t imagine what else it might be, assuming that his clients really didn’t approve the move.

Fajardo has dedicated his life’s work to this case, and I cannot imagine why on earth he would sign away the embargo on this award. Will we ever get to the truth?

In light of later developments, readers should treat this comment with a grain of salt!

Peter, I’ve just read Roger Parloff’s new article on this issue: it’s a doozy! It turns out there was much more to the story than I thought.

Ok – I had hoped for a better outcome for the LAPs on this one, but I do appreciate your efforts to help me make sense of it.

As I understand it, the Ecuadoran court ordered the Ecuadoran government to turn over the $96 million dollar debt as well as certain intangibles (trademarks and the like). The trademarks are one thing. I agree with you that under Ecuadoran law it seems that the plaintiffs should be entitled to have them turned over. Maybe they already have been. But money is fungible. So the Ecuadoran government can pay the $96 million, and (it seems to me, though I disclaim any knowledge of Ecuadoran law) the plaintiffs might still have whatever rights they had before against the Ecuadoran government, namely, a right to turnover of the $96 million.

If you’re saying that Ecuador could meet its international obligation by paying the $96 million to the Lago Agrio plaintiffs, I don’t think I agree, or at least, it’s not that simple. The Lago Agrio judgment may be settled as a matter of Ecuadoran law, but its international legitimacy has not yet been finally determined. The BIT arbitration is ongoing, as is the Canadian enforcement action.

OK, but surely if Ecuador pay the award then they have met their international obligations. If a third party has a legal attachment, is that really Ecuadors problem?
I know that the LAP judgement is difficult to enforce outside of Ecuador, but I cannot understand why it should not be enforced inside Ecuador.

Jeanne, thanks for commenting! Two quick responses:

1. You note that a Netherlands court vacated the award in the Yukos case on jurisdictional grounds. Julian Ku has noted that there is a potential avenue for China to mount such a jurisdictional challenge to the award in the ICJ (with the Philippines’ consent, of course). But it seems unlikely China will take this course, as it did not participate in the jurisdictional stage of the proceedings in the arbitration itself.

2. I know of no argument that can show why Article 288(4) of the UNCLOS (“In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be settled by decision of that court or tribunal”) doesn’t show that China is bound by the tribunal’s decision about jurisdiction, even if that decision was substantively wrong.

I would only add that it’s no fun for a great power to take its lumps in a case like this, as the United States had to do in Nicaragua v. United States. It will be a sign of the maturity of the Chinese legal academy if scholars are willing to criticize the position of their own government, which, it seems to me, is pretty clearly wrong in this instance.

The doctrine of “competence-competence” does not apply to the China case because China has explicitly reserved on the jurisdiction of territorial disputes when it ratified the UNCLOS.

Recently the District Court of The Hague set aside a US$50 billion awards against Russia in Yukos cases. Why? Although the tribunal ruled that it had jurisdiction, the court said no because the Energy Charter Treaty did not apply to Russia when the dispute occurred. The doctrine of “competence-competence” does not apply here.