An arbitration panel in The Hague said Ecuador should have prevented plaintiffs in a $19 billion award against Chevron Corp. from taking their battle to other countries, and needs to justify why its government shouldn't be held responsible for the costs.
In 2012, an Ecuadorian court ruled Chevron was responsible for environmental damages in that country's Amazon region, a decision the oil company is contesting. The international tribunal, which is studying the issue of whether the ruling constitutes a violation of a bilateral investment treaty between the U.S. and Ecuador, had asked the country to keep the plaintiffs from suing Chevron in foreign courts while the appeal was pending. But the plaintiffs filed lawsuits against Chevron assets in Canada, Argentina and other countries--a move the tribunal decided was a breach of Ecuador's obligations and of its previous rulings. Now the tribunal is asking the country's government why it shouldn't be held responsible for the harm done by the lawsuits filed by the plaintiffs outside Ecuador.The house of cards is starting to fall.