Claimants' Request for Interim Measures
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IN THE MATTER OF AN ARBITRATION UNDER THE RULES OF THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW ________________________________________________________________________ CHEVRON CORPORATION and TEXACO PETROLEUM COMPANY, CLAIMANTS, v. THE REPUBLIC OF ECUADOR, RESPONDENT. ________________________________________________________________________ CLAIMANTS’ REQUEST FOR INTERIM MEASURES ________________________________________________________________________ R. Doak Bishop James Crawford SC Wade M. Coriell Matrix Chambers Isabel Fernández de la Cuesta Gray’s Inn, London KING & SPALDING England WC1R 5LN 1100 Louisiana, Suite 4000 Houston, TX 77002 (713) 751-3205 (713) 751-3290 (Facsimile) Edward G. Kehoe Caline Mouawad KING & SPALDING 1185 Avenue of the Americas New York, NY 10036-4003 (212) 556-2100 (212) 556-2222 (Facsimile) April 1, 2010 TABLE OF CONTENTS Page I. INTRODUCTION AND INTERIM MEASURES REQUESTED .................................... 1 II. FACTUAL BACKGROUND CONCERNING THE SETTLEMENT AND RELEASE AGREEMENTS.................................................................................................................. 7 A. THE CONSORTIUM EXPLORED FOR AND PRODUCED OIL IN THE ORIENTE REGION OF ECUADOR................................................................................................7 B. TEXPET EXITED THE CONSORTIUM IN 1992, REMEDIATED FROM 1995-1998, AND RECEIVED FULL RELEASES OF LIABILITY IN 1998.............................................8 1. In 1994, TexPet, Petroecuador, and Ecuador Executed a Memorandum of Understanding Setting Forth TexPet’s Remediation Obligations .............................................................................8 2. In 1995, TexPet, Petroecuador and Ecuador Executed a Scope of Work and Settlement Agreement Specifically Detailing TexPet’s Remediation Obligations and Releasing TexPet from All Other Environmental Liabilities...........................................................................10 3. In 1996, TexPet Entered into Settlement and Release Agreements with Ecuador’s Political Subdivisions and Was Fully Released from All Environmental Liability ..............................................................12 4. By 1998, TexPet Had Completed its Remediation Obligations, Funded Additional Community Projects under the 1995 Settlement Agreement, and Was Fully Released from All Environmental Liability......................................................................................................14 5. Ecuador’s Current Environmental Remediation Programs........................16 C. IN 2001, THE U.S. FEDERAL COURT IN AGUINDA DISMISSED THE CLAIMS AGAINST TEXACO INC. ARISING FROM THE CONSORTIUM’S OPERATIONS ON FORUM NON CONVENIENS GROUNDS.......................................................................18 D. IN 2001, TEXACO INC. MERGED WITH A SUBSIDIARY OF CHEVRON CORPORATION ........................................................................................................19 E. IN 2003, PLAINTIFFS FILED A NEW AND DISTINCT CASE IN ECUADOR AGAINST CHEVRON—NOT TEXPET OR TEXACO INC.—ASSERTING CLAIMS UNDER THE EMA....................................................................................................19 F. ECUADOR’S JUDICIARY HAS BEEN PURGED BY THE EXECUTIVE BRANCH REPEATEDLY SINCE NOVEMBER 2004, AND IS NOT INDEPENDENT.........................22 G. ECUADOR HAS ACTIVELY SUPPORTED AND ASSISTED THE LAGO AGRIO PLAINTIFFS, AND PRESIDENT CORREA AND HIS ADMINISTRATION ARE DRIVING ITS OUTCOME ...........................................................................................35 H. IN THE FACE OF POLITICAL PRESSURE, THE LAGO AGRIO JUDGE PREJUDGED THE OUTCOME OF THE LAGO AGRIO LITIGATION AND ENGAGED IN IMPROPER, UNETHICAL, AND CORRUPT BEHAVIOR ..................................................................43 III. FACTUAL BACKGROUND CONCERNING THE CRIMINAL PROCEEDINGS...... 46 A. ECUADOR’S PROSECUTORS INVESTIGATED AND DISMISSED THE ORIGINAL CRIMINAL COMPLAINT AGAINST CLAIMANTS’ LAWYERS ......................................46 B. THE PRESIDENT OF THE SUPREME COURT REFUSED TO ARCHIVE THE CASE IN BREACH OF ECUADORIAN CRIMINAL PROCEDURAL LAW .......................................48 C. PRESIDENT CORREA AND THE GOVERNMENT DEMANDED THE PROSECUTION OF CLAIMANTS’ LAWYERS AND DISMISSED THE PROSECUTOR GENERAL WHO REFUSED TO PURSUE THE CASE ..............................................................................49 D. CONCERTED LAST-MINUTE EFFORTS BY PRESIDENT CORREA AND THE LAGO AGRIO PLAINTIFFS’ LAWYERS PRESSURED THE PROSECUTOR GENERAL INTO COMMENCING A PROSECUTORIAL INVESTIGATION .................................................52 E. THE ECUADORIAN COURTS IMPROPERLY ASSERTED JURISDICTION OVER THE CRIMINAL PROCEEDINGS AFTER THE STATUTE OF LIMITATIONS EXPIRED .............53 F. THE SUBSTANCE OF THE CRIMINAL PROCEEDINGS IS FABRICATED ........................54 IV. CLAIMANTS SATISFY THE REQUIREMENTS FOR INTERIM MEASURES......... 56 A. THE TRIBUNAL HAS PRIMA FACIE JURISDICTION ....................................................57 B. CLAIMANTS HAVE RIGHTS TO BE PROTECTED BY THIS TRIBUNAL, AND ECUADOR’S CONDUCT IS SUBSTANTIALLY HARMING THOSE RIGHTS .....................66 1. Provisional Measures Should Be Issued to Protect Rights from Substantial or Irreparable Harm.................................................................66 2. Without Interim Measures, Claimants’ Rights Will Be Substantially or Irreparably Harmed..........................................................72 a) Claimants Possess Important Contractual, Legal, and Treaty Rights under the Settlement and Release Agreements....................................72 b) Without Interim Measures, Claimants’ Rights Under the Agreements Will Suffer Substantial and Irreparable Harm.................79 c) Without Interim Measures, Claimants’ Treaty Right to Have this Tribunal Determine this Dispute Will Be Irreparably Harmed ...........81 d) Ecuador Should Be Prevented from Continuing its Conduct of Aggravating, Exacerbating and Extending this Dispute, Including its Baseless Criminal Proceedings Against Claimants’ Lawyers ........84 C. THE REQUESTED INTERIM MEASURES ARE URGENT BECAUSE THE RISK OF HARM TO CLAIMANTS IS IMMINENT .......................................................................91 D. CLAIMANTS ESTABLISHED A PRIMA FACIE CASE ....................................................94 E. GRANTING CLAIMANTS’ REQUEST WILL NOT DISPROPORTIONATELY BURDEN ECUADOR OR THE NOMINAL LAGO AGRIO PLAINTIFFS...........................................96 V. CONCLUSION................................................................................................................. 98 I. INTRODUCTION AND INTERIM MEASURES REQUESTED 1. Through this Arbitration, Claimants seek to protect and enforce their rights under binding agreements by which the Republic of Ecuador (“ROE” or “Ecuador”), Petroecuador and several local governments settled all environmental claims against Texaco Petroleum Company (“TexPet”) and its affiliates, and released them from all liability for environmental impacts in Ecuador. Claimants’ rights under these settlement and release agreements include the right to (1) be free of any further claims and obligations concerning environmental remediation in Ecuador (res judicata), (2) Ecuador’s good faith performance of the contractual and legal commitments by which it agreed that Claimants would not be liable for any further environmental claims, and (3) Ecuador’s specific performance of those agreements. 2. Ecuador is violating Claimants’ contractual, legal, and Treaty rights by failing to protect Claimants from, and affirmatively seeking to subject them to, the claims and liabilities from which Ecuador previously released Claimants. This is occurring through (1) civil litigation currently pending against Chevron in the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador (Case No. 002-2003-P-CSJNL) (the “Lago Agrio Litigation”), and (2) criminal proceedings pending as Prosecutorial Investigation No. 09-2008, Case No. 150-2009 before the National Court of Justice (formerly Prosecutorial Investigation No. 20-2008 against Engineer Patricio Rivadeneira García, et al., Supreme Court of Justice of Quito) against Mr. Ricardo Veiga and Mr. Rodrigo Pérez, two of Claimants’ lawyers (the “Criminal Proceedings”). 3. In the Lago Agrio Litigation, the 48 nominal Plaintiffs seek to hold Chevron liable for the same claims that Ecuador, Petroecuador, and four municipalities (and their cantons) and two provinces in the former Concession Area settled and released in the agreements that are the subject of this Arbitration. The Plaintiffs in the Lago Agrio Litigation do not seek any individual damages for alleged injuries to themselves or their property. Rather, they purport to act in a representative capacity, bringing public claims to remediate the former Concession Area as well as oil production facilities owned and controlled by Petroecuador. But Ecuador already settled and released those claims, and the Lago Agrio Plaintiffs’ claims are barred by res judicata. 1 4. Ecuador has refused to inform the Lago Agrio Court that Claimants have been released from those claims, and it has refused to absolve Claimants from liability for them. In fact, in breach of its good faith duty to protect and defend Claimants’ releases, Ecuador has actively supported the Lago Agrio Plaintiffs in their litigation against Chevron. To this end, Ecuador has sought to undermine the settlement and release agreements