Two decades into the battle over Chevron’s environmental legacy in Ecuador, the stage finally seems to be set for the final act. With Chevron facing an $18 billion Ecuadorean judgment over pollution in Lago Agrio and arbitrators mulling whether to roll the judgment back, it’s time to predict how the play will end. In my last Global Lawyer column, I concluded that ordering Ecuador to indemnify Chevron is the least problematic relief available to the arbitrators. In this column, I will explain how I see the global dispute playing out. Hint: Before the curtain falls, the oil company wins.
In his 2008 journal article “Arbitrating Human Rights,” Pepperdine law professor Roger Alford cited Chevron v. Ecuador as a model for a new class of litigation-to-arbitration disputes, beginning with a U.S. human rights case brought by private plaintiffs and culminating with a “who pays?” arbitration between the defendant company and the country where it invested. The end result, he argued, would be good for the human rights plaintiffs. Alford was prescient about the flow of the case, but his model breaks down in the legal jungle of Ecuador.
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