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The Global Lawyer – War-Gaming the Chevron Battle to End All Battles

Date: Nov 14, 2011

This article explores the legal scenario in which, as a result of the fraud that has come to light among other things, arbitrators order Ecuador to make Chevron whole for $18 billion:

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 Ecuadorian 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. …

Assuming the arbitrators order Ecuador to indemnify Chevron, do you really think Ecuador will let that $18 billion judgment stand? Ecuador’s appeal courts can simply overturn the judgment. Or perhaps even likelier: the appeals courts can reduce the judgment to a relatively token amount. Curtailing damages would preserve a semblance of anti-gringo justice for the domestic audience in Ecuador, and a semblance of judicial independence for the international audience. You heard it here first.

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