Chevron has just won a key battle in its 15-year legal struggle with the government of Ecuador and embarrassed some greedy American trial lawyers in the process.
The Permanent Court of Arbitration in the Hague awarded the oil company $700 million in damages after ruling that Ecuadorian courts violated an international agreement by ignoring seven breach-of-contract lawsuits.
The lawsuits were filed by Texaco Petroleum (which was later bought by Chevron) over a 1998 contract in which Ecuadorian officials certified Texaco’s environmental remediation in drilling operations with the government-owned Petroecuador. Texaco was a minority partner in the venture, which harvested 1.7 billion barrels of oil between 1972 and 1992. The Ecuadorean government got 95 percent of the profits.