Source: Business Week
March 10 (Bloomberg) -- Chevron Corp., the second-largest U.S. oil company, asked a federal judge to allow an arbitration panel to resolve a court fight over an environmental cleanup in Ecuador that might cost as much as $27 billion.
Lawyers for San Ramon, California-based Chevron and Ecuador appeared today before U.S. District Judge Leonard Sand in New York in the latest dispute in a 16-year court battle. Ecuador last year filed a lawsuit in New York seeking to block Chevron from taking the case to arbitration before an international panel. A lawsuit is pending in Ecuador, after originally being brought in New York.
“We are seeking to have an impartial, fair tribunal,” Chevron’s lawyer, Randy Mastro, told Sand. Arguments in the case will continue tomorrow.
Amazon Basin residents sued Chevron, the second-largest U.S. oil company, alleging damage to the Amazon rainforest from chemical waste produced in oil drilling by Texaco Inc. An expert for the Ecuadorean court has estimated damages at $27 billion. An earlier case filed by Ecuadoreans in New York against Texaco, which Chevron acquired in 2001, was dismissed after a judge said it should be litigated in Ecuador.
Chevron last year said it uncovered a $3 million bribery plot linked to the case. The company said it secretly taped recordings showed a presidential adviser seeking to influence the outcome of the case.
C. MacNeil Mitchell, a lawyer for Ecuador, told Sand that the U.S.-Ecuador Bilateral Investment Treaty, under which Chevron wants to arbitrate, doesn’t apply to pending suits such as this one. At today’s argument, Sand said the presence of a single issue subject to arbitration might defeat Ecuador’s effort to block arbitration.
The case is Republic of Ecuador v. Chevron Corp., 09-09958, U.S. District Court, Southern District of New York (Manhattan).