US Court of Appeals for the District of Columbia Circuit affirms recognition and enforcement of award in Chevron | Practical Law

US Court of Appeals for the District of Columbia Circuit affirms recognition and enforcement of award in Chevron | Practical Law

In Chevron Corp. v. Ecuador, the US Court of Appeals for the District of Columbia Circuit considered whether to allow recognition and enforcement of an UNCITRAL award in Chevron's favor where Ecuador had consented to allow the tribunal to consider issues of arbitrability.

US Court of Appeals for the District of Columbia Circuit affirms recognition and enforcement of award in Chevron

Published on 05 Aug 2015District of Columbia
In Chevron Corp. v. Ecuador, the US Court of Appeals for the District of Columbia Circuit considered whether to allow recognition and enforcement of an UNCITRAL award in Chevron's favor where Ecuador had consented to allow the tribunal to consider issues of arbitrability.
The US Court of Appeals for the District of Columbia Circuit has affirmed the recognition and enforcement of a US$96 million, Netherlands-seated UNCITRAL arbitration award in Chevron's favor.
The court noted that where a contract is silent on the matter, courts presume that the parties intend courts, not arbitrators, to decide disputes about arbitrability. However, in 1993, the US and Ecuador signed a bilateral investment treaty (BIT) providing that the investor company may submit a matter to arbitration under the UNCITRAL rules, which the BIT incorporated by reference. Those rules provide that the arbitral tribunal has the power to rule on objections that it has no jurisdiction, including any objections with respect to the existence or validity of the arbitration clause and to determine the existence or the validity of the contract of which an arbitration clause forms a part. Therefore, Ecuador consented to allow the arbitral tribunal to decide issues of arbitrability, including whether Chevron had "investments" within the meaning of the treaty.
The court concluded its opinion noting that four courts have also considered and rejected Ecuador's argument that Chevron did not have the right to avail itself of the BIT's arbitration clause and stated that "Ecuador has given us no reason to conclude that these many authorities ruled in error." Ecuador had challenged the award in the Dutch court system and the challenge was rejected by the District Court of The Hague, The Hague Court of Appeal and the Dutch Supreme Court.