Chevron Corporation v. Republic of Ecuador
949 F. Supp. 2d 57
D.D.C.2013Background
- Chevron Corporation and Texaco Petroleum petition to confirm a Final Award under the New York Convention (9 U.S.C. § 207).
- Ecuador opposes confirmation on FSIA subject-matter-jurisdiction grounds, NY Convention grounds, and a potential stay pending Dutch set-aside proceedings.
- Arbitration arose from Chevron’s 1973/1977 investments in Ecuador and related breach-of-contract disputes recorded in Ecuadorian courts, later incorporated into Hague arbitration (2006 arbitration filing).
- A three-member arbitral panel in The Hague issued an Interim Award (2008), a Partial Award on the Merits (2010), and a Final Award on the Merits (2011) finding Ecuador breached the BIT and ordering damages.
- Ecuador sought to set aside the Dutch award; the Hague District Court denied that request in 2012, and an appeal is pending.
- The District Court for the District of Columbia grants Chevron’s petition to confirm the Final Award and denies Ecuador’s stay request.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA arbitration exception provides subject matter jurisdiction. | Chevron: award is pursuant to BIT and NY Convention; within § 1605(a)(6). | Ecuador: arbitrability must be reviewed; argues lack of treaty-based consent in underlying dispute. | Arbitration exception applies; subject-matter jurisdiction exists. |
| Whether the Final Award is within the arbitrator’s scope under Article V(1)(c). | Tribunal resolved arbitrability and merits; review should be deferential. | Award beyond scope of submission because arbitrability ruling was incorrect. | Tribunal’s arbitrability decision accepted; award not beyond scope under deferential review. |
| Whether enforcement would violate US public policy under Article V(2)(b). | Enforcing the award aligns with NY Convention policy to enforce arbitration. | Enforcement would contravene sovereignty and ongoing Ecuadorian litigation. | Public-policy defense rejected; no contravention found. |
| Whether a stay of confirmation is warranted pending Dutch set-aside proceedings. | Immediate confirmation preferable to avoid protracted litigation; no stay. | Europcar factors justify staying to allow Netherlands review. | Europcar factors weigh against a stay; denial of stay affirmed. |
Key Cases Cited
- Republic of Argentina v. BG Group PLC, 665 F.3d 1363 (D.C. Cir. 2012) (UNCITRAL arbitration and BIT interpretation guide arbitral arbitrability)
- Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L’Industrie Du Papier (RATKA), 508 F.2d 969 (2d Cir. 1974) (limits on judicial review of arbitral decisions under NY Convention)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitrability decision and deference to arbitrators when delegated)
- AT&T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643 (U.S. 1986) (arbitrability ordinarily a judicial determination; deference when delegated)
- Creighton Ltd. v. Government of the State of Qatar, 181 F.3d 118 (D.C. Cir. 1999) (FSIA arbitration exception governs enforcement of arbitral awards)
- G.E. Transport, S.A. v. Republic of Albania, 693 F. Supp. 2d 132 (D.D.C. 2010) (NY Convention confirmation and discretionary stay considerations)