Introduction

In July 2004, an ad hoc arbitral tribunal broke new ground in investment and tax law, and awarded a U.S. States investor, Occidental Exploration and Production Company (OEPC), U.S.$75 million for the wrongful conduct of the Republic of Ecuador.[1] At issue was Ecuador's tax system, the interpretation of an investment contract, and refund requests for value-added tax (VAT). Although the tribunal did not find expropriation or impairment of OEPC's investment, it held that Ecuador violated the United States/Ecuador bilateral investment treaty (BIT)[2] by (1) failing to provide ...