Jessica M. Karmasek Sep. 24, 2013, 2:00pm

WASHINGTON (Legal Newsline) -- The international arbitration tribunal that last week found Chevron Corp. not liable for environmental claims in Ecuador is a "quasi court" and lacks the authority to consider such claims, a spokesman for New York attorney Steven Donziger and the Ecuadorian plaintiffs argues.

The tribunal is convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty, also known as the BIT, and administered by the Permanent Court of Arbitration.

The PCA, located in The Hague, Netherlands, administers cases arising out of international treaties and other agreements to arbitrate.

Last Tuesday, the tribunal issued a partial award in favor of Chevron and its subsidiary, Texaco Petroleum Company, or TexPet.

The tribunal found that the settlement and release agreements that the government of Ecuador entered into with TexPet released TexPet and its affiliates of any liability for all public interest or collective environmental claims.

Christopher Gowen of Washington, D.C.-based The Gowen Group Law Office PLLC argues that the decision was essentially "purchased" by Chevron.

"Chevron has lost on this issue every time, including in front of the Ecuadorian courts actually competent to decide the question, and additionally lost in front of a U.S. federal court as part of the company's massive collateral litigation campaign," Gowen said Sunday.

"Chevron has now found a quasi 'court' willing to buy its goods: a secretive 'tribunal' of private lawyers, convened and paid by Chevron, with no experience in Ecuadorian law, no proper jurisdiction to consider such claims, and no legitimacy whatsoever."

Gowen said the tribunal's decision, which illustrates that the oil giant only can win when it "runs away from legitimate institutions and seeks refuge behind pro-corporate ideologues," "sadly mirrors" an unfolding situation in the U.S. District Court for the Southern District of New York.

"After three years of grandstanding about the 'fraud' it suffered in Ecuador, Chevron is quietly preparing to drop most of its claims to avoid having to prove them to a jury and instead seek refuge in a bench trial before a district judge whose bias in favor of Chevron is so notorious that next week the U.S. Court of Appeals for the Second Circuit is convening an almost unprecedented hearing on whether the district judge should be removed from the case," he said.

"While companies like Exxon and BP are paying for cleanups from accidents, Chevron refuses to pay a dime for the cleanup that resulted from their deliberate action."

Last week's award came after the tribunal's finding in February that Ecuador is in breach of its obligation to "take all measures necessary to suspend or cause to be suspended the enforcement" of the Lago Agrio judgment.

In prior rulings, the tribunal put Ecuador on notice that if Chevron's arbitration ultimately prevails, "any loss arising from the enforcement of (the judgment) may be losses for which the (Republic) would be responsible to (Chevron) under international law."

Chevron claims that Ecuador has breached its obligations under the BIT and international law through the Lago Agrio litigation, the resulting judgment and an appellate decision upholding the judgment.

The appellate court's ruling, issued last year by a panel of three temporary judges in the Provincial Court of Justice of Sucumbios in Lago Agrio, upheld the $19 billion judgment against the company for its alleged contamination of the country's rainforest.

The ruling, which stems from an environmental lawsuit involving Texaco Petroleum, confirmed a lower court's ruling in February 2011.

The lower court had found the company liable for dumping billions of gallons of toxic waste into the Amazon, causing an outbreak of disease and decimating indigenous groups.

The next arbitration hearing is scheduled for January 2014.

Through the arbitration, Chevron seeks to hold Ecuador accountable for the denial of justice that occurred through the Lago Agrio court's actions during the litigation and the issuance of what it says is a "fraudulent" judgment.

The oil giant, which has vowed never to pay the $19 billion judgment, filed a racketeering lawsuit in the Southern District of New York in 2011, alleging that the Ecuador suit has been used to threaten the oil company, mislead U.S. government officials, and harass and intimidate its employees -- all to extort a financial settlement from the company.

That trial is set to begin next month.

From Legal Newsline: Reach Jessica Karmasek by email at

More News