(CN) – An arbitration tribunal at The International Court of Justice at The Hague ordered the government of Ecuador to pay Chevron and its current subsidiary Texaco $96 million for “undue delays” of 15 years in ruling on seven commercial disputes in the early 1990s.
The ruling does not affect – or directly involve – the $18.2 billion judgment that a provincial Ecuadorean court ruled against Chevron in early 2011 in connection with a massive oil spill in the Amazonian region of Lago Agrio.
Chevron and Texaco filed the international arbitration case in December 2006, in response to seven commercial claims that Texaco filed in Ecuador between 1991 and 1993.
Those claims occurred long before the Lago Agrio case, which first arrived at the Lago Agrio court in 2001 and ended with the multibillion dollar verdict on Feb. 14, 2011.
“This ruling confirms that Ecuador can be held accountable for its obligations under international law,” Chevron lawyer and vice president Hewitt Pate said in a statement. “Since Ecuador’s politicized court system has failed to provide impartial tribunals and due process, Chevron has had to seek international remedies.”
A Chevron spokesman hoped the ruling would cast doubt on Ecuador’s courts, which awarded the multibillion dollar environmental verdict it is fighting on three continents.
“This award does not have a direct impact on the ongoing environmental litigation, but it further illustrates the dysfunction of Ecuador’s judiciary,” Kent Robertson said.
Chevron and Texaco have long maintained that Ecuador’s national oil company is responsible for the spill, and hope that The Hague will look into the country’s handling of the case.
The Hague has not decided whether it would hear Chevron’s arbitration claim regarding the Lago Agrio judgment, a spokeswoman for the Ecuadoreans said.
In 1993, a group of Ecuadorean natives sued Chevron’s predecessor Texaco in Manhattan federal court, claiming Texaco dumped billions of gallons of toxic oil waste into the water supply of the Amazon, wrecking the environment and spreading disease.
Eight years later, Texaco – newly acquired by Chevron – claimed the American courts had no jurisdiction over the case and successfully removed the case to a provincial court in Lago Agrio, Ecuador.
At The Hague, Ecuador argued that Chevron’s praise of its courts in 2001 belied its criticism of the judiciary in the early 1990s, when Texaco stopped drilling in the country.
The Hague rejected that argument on Wednesday.
“These statements ‘reflected different opinions articulated at a different point in time, about different Ecuadorian judiciary by different parties in different litigation,'” the 142-page final award states.
Ecuador’s judiciary gets low rankings in both domestic and international reports, and Transparency International’s Corruption Perceptions Index now places it at 2.5 on a 10-point scale. But the Ecuadoreans say this actually reflects a slight improvement compared to its position when Chevron handpicked the venue in the Lago Agrio case.