Lago Agrio: Update on the New Dutch Decision

I reported yesterday on Ecuador’s appeal from a Dutch decision refusing to annul the interim awards in the investment treaty arbitration between Chevron and Ecuador. I didn’t have the translation of the decision available in time for the post, but I’ve just received it.

The one part of the decision I’d like to call to your attention is the court’s response to Ecuador’s argument that the interim order requiring it to suspend the judgment didn’t force Ecuador to violate its own law or the separation of powers.

Contrary to what Ecuador seems to assume, the BIT and/or the UAR are not implying that the Arbitration Tribunal can only assess whether Ecuador is bound to compensate losses on the basis of being liable for the violation of the BIT, not even if the alleged violation was committed by her judicial power. Further the appeal court is of the opinion that, contrary to what Ecuador suggests, the Arbitration Tribunal did not order Ecuador to intervene with her executive power in the tasks that are reserved for the judicial power, and would thus interfere in the separation of powers. Ecuador, briefly, has been ordered to suspend the execution of the Lago Agrio judgment within and outside of Ecuador. This order extends to all government bodies whose cooperation is required to executed the award. It is up to the republic of Ecuador to determine by whom and in which manner the measures as imposed by the Arbitration Tribunal are executed, her executive power, her legislative power or her judicial power, or a combination thereof, for instance by provisionally not granting an apostille or by suspending the legalization. Thus Ecuador has not been ordered to exert influence on the contents or the outcome of a judgment to be issued by an Ecuadorian judge, neither has she been ordered to instruct a foreign judge to refuse the recognition of the Lago Agrio judgment, but (only) to suspend its execution (or have it suspended). The measure is not final yet. Ecuador is not ordered to stop the execution forever, but only to have the execution suspended until the arbiters in the arbitration have made the final award …

I think it’s basically right to say that it’s up to Ecuador how to comply with the award, but I think it’s really interesting to see how the court tries to suggest ways that Ecuador could do that. The suggestion is that Ecuador could refuse to affix an apostille to the judgment or otherwise to legalize the judgment. Perhaps what I’m about to say would not be true everywhere in the world, but certainly in the United States, there would be other ways to authenticate the Ecuadoran judgment even if it is not made self-authenticating with an apostille or another stamp or seal. Is this the best that could be suggested? I think the better approach is to say that it may well be that Ecuador would have to violate its own law in order to obey the interim award, but that as a matter of Ecuador’s international commitments, that’s Ecuador’s problem, not Chevron’s. By way of comparison, if you remember the Medellín case, the United States could hardly claim that it had not breached its international obligations by executing the Mexican death row inmate even though, as a matter of American law, the federal government lacked the power to compel the Texas state government to put off the execution.

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