Chevron says Ecuador arbitration to stretch into 2014

Thu Aug 2, 2012 11:11pm IST

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* Int'l arbitration panel to hear first evidence by Nov

* Ecuador court increased damages against Chevron to $19 bln

* Chevron suing original plaintiffs and lawyers for fraud

By Braden Reddall

SAN FRANCISCO, Aug 2 (Reuters) - An international tribunal that will weigh in on Chevron Corp's two-decade dispute over pollution in Ecuador has set a timeline that runs into 2014, according to a Chevron regulatory filing on Thursday.

The panel, formed via The Hague's Permanent Court of Arbitration under the United Nations Commission on International Trade Law, is hearing a dispute over whether Ecuador violated a treaty with the United States requiring it to guarantee Chevron a fair trial.

An Ecuador court ruled against Chevron in February 2011. Last week, damages stemming from that hotly contested decision were increased to $19 billion from $18.2 billion.

Chevron said the international tribunal will hear by late November about the scope of a 1998 settlement and release agreement given by Ecuador's government to Texaco, the company that operated in Ecuador.

Chevron, based in San Ramon, California, east of San Francisco, purchased Texaco in 2001.

"On July 9, 2012, the Tribunal indicated that it wanted to hear the remaining issues in January 2014," Chevron disclosed in its quarterly filing with the U.S. Securities and Exchange Commission on Thursday.

Ecuador's attorney general has argued the tribunal has no jurisdiction because the bilateral trade agreement between the United States and his country went into effect five years after Texaco ended operations in Ecuador in 1992.

But earlier this year, the three-person panel reinforced its interim order that Ecuador suspend court-awarded payments of claims against Texaco, which was accused of polluting the rain forest and sickening people there. Some of those residents sued the company.

Chevron says it uncovered through U.S. courts evidence of fraud by lawyers for the Ecuadorean plaintiffs, which the lawyers deny. The second-largest U.S. oil company is pursuing racketeering and fraud charges against the plaintiffs and their attorneys, and a New York judge ruled this week the fraud case could go ahead.

Meanwhile, since Chevron has no assets in Ecuador, the Ecuadorean plaintiffs have launched legal actions in Canada and Brazil to enforce their $19 billion award. Their spokeswoman says the New York case is "irrelevant" to the other actions.

Anticipating such a global legal battle, Chevron filed for the arbitration in September 2009. The panel includes a Chevron-named member, Horacio Grigera Naon of the American University law college, one named by Ecuador, Oxford Professor Vaughan Lowe, and London lawyer V.V. Veeder, chosen by the other two.

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