Perenco Ecuador Ltd v Republic of Ecuador - United States District Court for the District of Columbia Case No 1-19-cv-02943 - Memorandum Opinion - 16 March 2023
Perenco Ecuador Ltd. ("Perenco"), a company that explores and exploits hydrocarbons internationally, invested in two blocks of oil reserves in Ecuador in the early 2000s.1 Within a few years, Perenco and Ecuador reached an impasse: Ecuador cancelled Perenco's contracts because Ecuador was not sharing in the extraordinarily high revenues Perenco earned while oil prices soared. The Parties submitted their dispute to the International Convention on the Settlement of Investment Disputes ("ICSID"), an international organization created to arbitrate this type of investor-state dispute. ICSID granted Perenco an Award for about $400 million. Perenco then petitioned this Court to enforce the Award against Ecuador.
In its response, Ecuador asks this Court to set off a portion of the Award with unpaid tax debts that Perenco allegedly owes, and to stay another portion of the Award while other tax issues are resolved. Ecuador also asks this Court to order that post-judgment interest be calculated at the statutory rate specified in 28 U.S.C. § 1961, rather than the post-award interest rate provided in the ICSID Award.
The Court grants Perenco's Petition to Enforce the Arbitration Award. Because there is a genuine dispute about the finality of the tax debts in this case, the Court denies Ecuador's requests to set off a portion of the ICSID Award and to stay the case pending resolution of the Parties' tax dispute. However, the Court agrees with Ecuador that post-judgment interest should be calculated in accordance with 28 U.S.C. § 1961.