At oral argument, the Second Circuit judges questioned the power of a U.S. district court to enjoin enforcement of the $18 billion judgment, which was issued by an Ecuadorian court in February over oil pollution in that country’s Amazon region. But what about the power of investment arbitrators to enjoin enforceability? A remedial order directed at a national court would surely test the limits of arbitral power. Such an order, however, is not necessary for Chevron to prevail.
To see why not, it’s worth reviewing what relief Chevron has sought, and what relief the arbitrators have granted so far. In its September 2009 notice of arbitration, Chevron requested, among other things, a declaration that Ecuador violated both its promise to indemnify Chevron when it ended operations in the country and its obligation under the U.S.-Ecuador investment treaty to give investors an “effective means” to enforce their rights in Ecuadorian courts. In addition, Chevron asked for an order forcing Ecuador to indemnify it for any damages collected by the Lago Agrio plaintiffs. The tribunal, acting under the supervision of the Permanent Court of Arbitration, is comprised of V. V. Veeder and Vaughan Lowe, both barristers at London’s Essex Court Chambers, and the Argentine former secretary general of the ICC Arbitration Centre, Horacio Grigera Naon.
