When the corrupted judiciary of a sovereign state threatened Chevron’s business, the U.S. oil and gas major turned to King & Spalding.
Ecuador’s state oil company, PetroEcuador, begins operations in Lago Agrio oil field. Texaco Petroleum (TexPet, which later became a subsidiary of Chevron in 2001) joins as a minority partner.
Individual plaintiffs (indigenous Ecuadorians) file an environmental class action in New York federal court.
Leaving the Ecuador consortium, TexPet agrees to clean waste pits in proportion to its 37.5% interest, spending three years and $40M to meet international standards. TexPet is released from liability.
The Government of Ecuador grants TexPet a “final release” of all claims for environmental impact arising from the Lago Agrio concession area.
Local and American lawyers file a new suit against Chevron in a small regional court in Ecuador, claiming generalized environmental harm. Concerns regarding fraud and due process quickly emerge.
King & Spalding files a treaty arbitration against Ecuador on behalf of Chevron and TexPet under U.S.-Ecuador BIT, alleging that Lago Agrio violated the 95-98 settlement and other protected rights.
The BIT tribunal orders Ecuador to suspend enforcement of the Lago Agrio judgment worldwide and later holds Ecuador in breach of the treaty and international law for failing to do so.
The BIT tribunal hears evidence of fraud and due process violations in the Lago Agrio litigation in a 3-week oral hearing with over a dozen witnesses, including “insider” Judge Alberto Guerra.
The District Court of The Hague rejects Ecuador’s attempt to set aside the arbitral awards at their legal seat, and upholds all of the BIT tribunal’s awards to date.
The plaintiffs’ controversial attorney Steven Donziger used flamboyant, theatrical tactics to influence the media and public opinion.
As an “insider” witness to the fraud, former Ecuadorian judge Alberto Guerra acknowledged his participation in an utterly corrupt judicial system, and confirmed that the Lago Agrio judgment was bought and paid for by the plaintiffs’ lawyers.
K&S defeated Ecuador’s request to stay the BIT arbitration before a D.C. federal district court, and headed up enforcement efforts against Ecuadorian assets related to a prior $100 million award.
The firm helped local counsel prepare for the litigation and appeals before Ecuador’s courts, and worked closely with Ecuadorian legal experts to develop Chevron’s claims in the arbitration.
King & Spalding worked hand-in-hand with Dutch counsel for Chevron to defend the BIT tribunal’s awards before the Dutch courts at the seat of the arbitration.
There are few firms that have the experience and resources to tackle the challenges faced by today’s global companies, whether it’s an existential threat relating to expropriation of assets, or a trade dispute involving companies from different countries.
K&S is recognized as a pioneer that has broken new ground in developing legal concepts that have benefited their clients.
K&S has a history of successfully representing oil and gas companies. That institutional knowledge helps us anticipate issues that will come up in disputes for this industry.
K&S was able to help Chevron defend its global reputation, presenting the facts of the case accurately to the press and announcing favorable rulings as they occurred, to counter the plaintiffs’ lawyers’ attempts to hype the drama.