Dow Jones | October 29, 2009
Ecuador prepares for new hearings in Occidental case
By Mercedes Alvaro
QUITO -(Dow Jones)- A team of lawyers will represent Ecuador in Paris in next week’s hearing in the arbitration case filed against the Andean country by U.S. oil company Occidental Petroleum Corp. (OXY).
Ecuador’s Office of the Solicitor said Thursday the hearings will take place between Nov. 3-7.
Occidental filed the claim with the World Bank’s International Centre for Settlement of Investment Disputes, or ICSID, in July 2006.
Occidental is seeking $3.2 billion in damages for Ecuador’s May 2006 decision to cancel the company’s operating contract, alleging Occidental broke several of its terms by transferring a 40% stake in its Ecuadorian projects to Canada’s EnCana Corp. (ECA) without Energy Ministry approval.
After its contract was canceled, Occidental asked the ICSID to return control of its operations, assets and investments in Ecuador, saying the Ecuadorian government violated the U.S.-Ecuador bilateral investment treaty by illegally nullifying its exploration rights and expropriating its assets.
Last year Occidental increased the damage claim from $1 billion to $3.2 billion.
The government has said the World’s Bank’s arbitration court may rule early next year.