ARBITRAL INSTITUTION AND SITE: Permanent Court of
Arbitration (UNCITRAL)/The Hague
NOTES: An arbitration designed to protect Chevron from the epic
environmental trial brought in Lago Agrio, Ecuador. In the underlying suit, residents of the Ecuadorian Amazon allege that Texaco
Petroleum Company devastated the area through its oil operations in Ecuador from 1972 to 1992, as the minority owner of a
consortium with PetroEcuador. This ad hoc arbitration, filed in
September 2009, is being conducted under the UNCITRAL rules
by arbitrators meeting in London under the supervision of the
Permanent Court of Arbitration in The Hague. Chevron’s statement
of claim argued that Ecuador breached the 1998 settlement and
release agreement it signed with Texaco by allowing the trial to
proceed; and that the trial was violating the U.S.–Ecuador investment treaty, as well as international law, because it was rife with
fraud and collusion. Ecuador thoroughly contests the claim. In
March 2010 a U.S. district court in New York declined to stay this
treaty arbitration, and in March 2011 the U.S. Court of Appeals
for the Second Circuit affirmed. The hearing on arbitral jurisdiction
took place in November 2010. On February 9, 2011, the arbitrators granted interim measures, ordering Ecuador not to advance
enforcement of any Ecuadorian court judgment against Chevron.
The Ecuadorian court judgment came down five days later, in the
amount of roughly $18 billion (including roughly $9 billion that
kicked in after Chevron did not apologize within two weeks).
The arbitration asks, among other things, for an order that
Ecuador reimburse Chevron for any damages, and a declaration
that Chevron is not liable for damages.
AMOUNT IN CONTROVERSY: $18 billion
DISPUTE: Eureko B.V. (The Netherlands) v. Republic of Poland
CLAIMANT’S COUNSEL: NautaDutilh; White & Case
RESPONDENT’S COUNSEL: Hogan & Hartson
ARBITRAL INSTITUTION AND SITE: Ad hoc/Brussels
NOTES: A dispute arising from the privatization of Poland’s largest
insurer, PZU S.A. Arbitration was initiated in 2003 by the Dutch
insurer Eureko B.V., which was frustrated by Poland’s refusal to
bring PZU public, or to let Eureko acquire control. Eureko, which
was PZU’s largest private shareholder, claimed that it was entitled to acquire control over PZU under a 1999 share purchase
agreement and a 2001 addendum. In August 2005 the tribunal
held Poland liable for violating the “umbrella clause” of its investment treaty with the Netherlands, as well as its provisions on fair
and equitable treatment and expropriation. The case settled in
autumn 2009, before the arbitrators could rule on damages. The
settlement cleared the way for PZU to go public in April 2010 and
for Eureko to sell its stake to financial investors in November for
$1.4 billion.
AMOUNT IN CONTROVERSY: $11 billion
DISPUTE: Libananco Holdings Co. Limited (Cyprus) v. Republic
of Turkey
CLAIMANT’S COUNSEL: Crowell & Moring
RESPONDENT’S COUNSEL: Freshfields Bruckhaus Deringer;
Cosar Avukatlik Burosu
ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C.,
and Paris
NOTES: A claim under the Energy Charter Treaty for expropriation
of the majority stake Libananco allegedly held in two utilities that
operated 11 Turkish dams and power plants, previously controlled
by the Uzan clan. In 2003 Turkey canceled the concessions and
seized the facilities of the two companies, Cukurova Elektrik
Anonim Sirketi and Kepez Elektrik Turk Anonim Sirketi. Claimant
ascribes to Turkey improper political motives. Turkey suspects
Libananco of ties to the Uzans, and questions its status as a for-
eign investor. The decision on jurisdiction was pending when this
survey was conducted.
AMOUNT IN CONTROVERSY: $4.8 billion
DISPUTE: Cementownia “Nowa Huta” S.A. (Poland) and Polska
Energetyka Holding S.A. (Poland) v. The Republic of Turkey
CLAIMANT’S COUNSEL: No counsel
RESPONDENT’S COUNSEL: Baker & McKenzie
ARBITRAL INSTITUTION AND SITE: Ad hoc (UNCITRAL)/
The Hague
NOTES: Another case arising out of Turkey’s fight with the Uzan
business empire. In this consolidated arbitration, claimants
alleged expropriation under the Poland–Turkey BIT of its stakes
in various companies once owned by the Uzans. Turkey countered
that when it took the measures that claimants call expropriatory,
it was investigating the largest banking fraud in its history, and
seeking recovery of embezzled funds. The cases were discontinued
by a July 2009 termination order for claimants’ failure to pursue
them. The panel awarded Turkey $1.7 million in legal costs in
November 2009.
AMOUNT IN CONTROVERSY: More than $4 billion (including over
$1 billion counterclaim)
DISPUTE: Occidental Petroleum Corporation (U.S.) and Occidental Exploration and Production Company (U.S.) v. The Republic of
Ecuador
CLAIMANT’S COUNSEL: Debevoise & Plimpton; Covington &
Burling
RESPONDENT’S COUNSEL: Squire, Sanders & Dempsey;
Dechert; Foley Hoag; Attorney General of Ecuador
ARBITRAL INSTITUTION AND SITE: ICSID/Washington, D.C.
NOTES: Soon after Occidental won a 2004 tax arbitration for
$75 million, Ecuador accused the company of having breached
Ecuadorian law by handing a stake in its oil concession to a
Canadian energy company without government approval. Ecuador
stripped Occidental of its Amazonian concession on May 15,
2006. Two days later, Occidental filed this arbitration against
Ecuador and its state oil company, grounded in both the U.S.–
Ecuador BIT and the parties’ production sharing agreement.
Ecuador has counterclaimed for $82 million in damages related
to the seizure and $1 billion in moral damages. The tribunal
asserted jurisdiction in 2008, and held hearings for a total of
23 days. A final award is expected in 2011.
AMOUNT IN CONTROVERSY: $4 billion
DISPUTE: Cementownia “Nowa Huta” S.A. (Poland) v. Republic
of Turkey
CLAIMANT’S COUNSEL: formerly Mannheimer Swartling
RESPONDENT’S COUNSEL: Freshfields Bruckhaus Deringer;
Cosar Avukatlik Burosu
ARBITRAL INSTITUTION AND SITE: ICSID/Paris
NOTES: Cementownia was one of several claimants to come
forward after Turkey seized the assets of two large hydroelectric
