Lago Agrio: Dutch Appellate Court Affirms Decision Rejecting Ecuador’s Challenge to Arbitral Award

Lago Agrio courthouse
The courthouse in Lago Agrio. Credit: Ted Folkman

I’m a little late to this, but there has been a significant development in the investment treaty dispute between Chevron and Ecuador. As long-time readers know, an arbitral tribunal found that the Lago Agrio judgment was fraudulent and that Ecuador was liable to Chevron and had an obligation to suspend the Ecuadoran judgment’s enforceability. Ecuador sought to annul the award in the Dutch courts, but in 2020, the court of first instance rejected its claim. Ecuador appealed, and in the most recent decision, dated June 28, 2022, the Court of Appeal of The Hague affirmed the lower court’s decision. As far as I know, as of now the decision is available only in Dutch.

In September, Ecuador announced that it plans to appeal to the Dutch Supreme Court, so the case isn’t over yet. Ecuador’s view, expressed in proceedings about whether it should be entitled to US trade preferences, has long been that it honors international arbitral awards but that the Chevron award is not final while the case is still being reviewed by the Dutch courts and that in any case the Ecuadoran executive cannot interfere with the judiciary. If the Dutch Supreme Court follows the lower courts’ view, then we will see whether Ecuador is prepared to honor the award.

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