Case Report (free download)
Case Report by Dimitrij Euler, Editor Ignacio Torterola
The District Court of The Hague rejected Ecuador's set-aside claim in its judgement of 20 January 2016. In doing so, this court stated that the Ecuador-USA BIT is sufficiently broad to cover the dispute. In particular, Chevron may rely independently on the 1995 Settlement Agreement even though it was not a signatory at the time of the singing. Moreover, the District Court rejected Ecuador's second claim that the awards that ordered Ecuador to suspend its Lago Agrio judgments violate public policy under the Dutch Arbitration Act, as, firstly, Ecuador voluntarily, unambiguously, and unconditionally bound itself and its judiciary in the BIT and therefore may neither argue that these awards interfere with its sovereignty and independence nor with its judiciary, and; secondly, the awards did not interfere with the rights of Ecuadorian citizens since the claims against Ecuador entail that Ecuador is exclusively liable for the damages awarded to Lago Agrio claimants. Even if these claims interfere with their rights, serious indications exist that the judgements at the first instance in the Lago Agrio proceedings came into fraudulent and rendered under political pressure and therefore provide justification for (temporary) consequences for the Lago Agrio claimants. Finally, the District Court rejected Ecuador's last claim that the tribunal exceeded its power as the granted interim measures by their nature where not interim measures and therefore cannot be granted under the authority based on Art. 26 Arbitration Rules. Hence, all claims were denied and Ecuador was order to pay the costs.
Review of arbitral awards - Consent to jurisdiction through treaties - Public policy (Netherlands, Standard of Review)
Case report provided by International Arbitration Case Law (IACL)
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