Ecuador court rejects Chevron arbitration ruling

Mon Feb 20, 2012 2:35pm EST
 
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By Eduardo Garcia

QUITO (Reuters) - A court in Ecuador has rejected an order by arbitrators that an $18 billion pollution ruling against Chevron should be frozen, but the judges referred an appeal by the U.S. oil company to the country's Supreme Court.

A year after the landmark decision against Chevron, a panel working for The Hague's Permanent Court of Arbitration told Ecuador last week to take all necessary measures to suspend enforcement of the award at home and abroad.

But in a ruling made public on Monday, the court that has been considering the case in the remote Amazon jungle region of Sucumbios said Ecuador should not comply with that order.

"A simple arbitral award ... cannot force judges to infringe the human rights of our citizens," said the court, adding that abiding by the panel's order would be unconstitutional and would lead to the breach of international human rights conventions.

The court said it had accepted an appeal filed by Chevron, however, and referred it to the Supreme Court in the clearest sign yet that the litigation, which has already run nearly 20 years, could drag on for more years.

The plaintiffs say The Hague panel's ruling will not affect their plans to collect on the $18 billion award in other countries where Chevron has assets.

"We intend to do everything in our power to ensure Chevron's management team meets the company's legal obligations and pays the full amount of the judgment," said Pablo Fajardo, the lead lawyer for the plaintiffs.

CASE WATCHED CLOSELY   Continued...

 
Motorists are shown at gas pumps at a Chevron gasoline station in Burbank, California July 31, 2009. REUTERS/Fred Prouser