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Ecuador Rejects Chevron Arbitration Claim

By Gonzalo Solano, , Associated Press
24 September 2009

Ecuador on Thursday rejected as an inappropriate last-ditch effort Chevron Corp.'s attempt to force it into international arbitration so it might share liability in a $27 billion lawsuit over environmental damage in the Amazon rainforest.

In a statement, the Attorney General's office said U.S.-based Chevron was trying to achieve through arbitration what it couldn't in U.S. and Ecuadorean courts.

Also Thursday, the judge presiding over the case said he would appeal a court decision earlier this week denying his request to be removed from the case because of allegations he was involved in a purported bribery scheme.

The removal of Judge Juan Evangelista Nunez would delay a verdict that had been expected this year.

In the petition filed with the Permanent Court of Arbitration in the Hague, Netherlands, on Wednesday, Chevron claims that Ecuador's conduct — leftist President Rafael Correa has expressed sympathy for the plaintiffs — violates a U.S.-Ecuador investment treaty and other trade agreements. The company says it cannot receive a fair trial in Ecuador.

The move marked Chevron's third attempt to force Ecuador into arbitration related to the lawsuit, which was first filed in a New York court in 1993. An attempt by Chevron to force Ecuador into arbitration in the United States failed when the U.S. Supreme Court rejected an appeal in June.

Ecuador's initial lawsuit, filed against Texaco, alleged that the company contaminated the environment in the Amazon from 1964-1990, when it operated a consortium that included Ecuador's state-owned oil company, Petroecuador. After Chevron bought Texaco in 2001, the case was refiled in Ecuador.

The plaintiffs, who say they represent 30,000 inhabitants of the region, seek damages for cleanup and illnesses they attribute to oil-drilling contamination. A court-appointed expert has set potential damages at $27 billion.

Texaco spent millions to clean up the region as part of a 1998 agreement with the government and Chevron says it is not liable for further damages. It says Petroecuador continued to pollute the region after Texaco left in 1992.

The Attorney General's office said Ecuador would defend itself "with integrity and judicial thoroughness" against Chevron's arbitration claim in the Hague.

Judge Nunez asked to be removed from the case earlier this month after Chevron released a video in which two businessmen repeatedly ask him if he planned to rule against Chevron and he is heard to answer "yes." Chevron says the businessmen were asked to pay million-dollar bribes for a remediation contract by a political ally of Correa.

Nunez says the video was "edited and manipulated" but asked to be recused to facilitate a government investigation.

The plaintiffs say they suspect the businessmen may have been colluding with Chevron in an attempt to discredit both the judge and Correa's government.

A judge on Tuesday rejected Nunez's recusal request, which Nunez said would now go before a three-judge panel.

 

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