## Facts

- Chevron Corporation and Texaco Petroleum Company initiated an investor–state arbitration against the Republic of Ecuador under the UNCITRAL Arbitration Rules (1976) pursuant to the U.S.–Ecuador bilateral investment treaty.
- The dispute arose against the backdrop of Ecuadorian court proceedings (the Lago Agrio litigation) concerning alleged environmental harm from oil operations, culminating in a large monetary judgment against Chevron.
- Claimants alleged Ecuador breached treaty obligations, including by denial of justice and unfair treatment in connection with the Lago Agrio proceedings.
- The Lago Agrio plaintiffs threatened to pursue recognition and enforcement of the Ecuadorian judgment against Chevron assets outside Ecuador.
- Claimants filed a second application for revised interim measures seeking relief aimed at preventing enforcement or recognition of the Lago Agrio judgment during the arbitration.
- Ecuador declined to submit written argument on the second application and provided information about related U.S. court proceedings involving Chevron and persons connected to the Lago Agrio case.
- The tribunal had issued earlier interim-measures orders in May 2010 and January 2011 addressing related requests to preserve the arbitral process.

## Issues

1. Whether the tribunal had authority under the treaty and the UNCITRAL Rules to order interim measures binding on Ecuador that relate to the enforcement effects of an Ecuadorian court judgment.
2. Whether the requested measures fell within permissible interim relief, including preserving the status quo and preventing aggravation or extension of the dispute.
3. Whether urgency and a risk of irreparable or non-compensable harm justified interim measures in light of threatened worldwide enforcement efforts.
4. Whether, and how, interim measures could be framed to operate through Ecuador’s international obligations without the tribunal acting as an appellate body over Ecuador’s courts.

## Decision

- The tribunal granted interim measures in favor of Chevron and Texaco Petroleum Company.
- The tribunal affirmed jurisdiction and power to order interim measures under the treaty and the UNCITRAL Rules to preserve rights and prevent aggravation or extension of the dispute.
- The tribunal found urgency and a sufficient risk of irreparable prejudice if the Lago Agrio judgment were recognized or enforced internationally before the arbitration concluded.
- The tribunal ordered Ecuador to take steps to prevent enforcement or recognition of the Lago Agrio judgment to the extent such actions would aggravate or expand the dispute or impair the effectiveness of the arbitration.
- The tribunal treated parallel national litigation as not precluding interim measures and maintained the tribunal’s independent authority to protect the arbitral process.

## Legal Principles

- An UNCITRAL tribunal may order interim measures necessary to preserve the rights of parties and to prevent aggravation or extension of the dispute, including measures directed to safeguarding the effectiveness of a future award.
- Interim measures may be granted where there is urgency and a serious risk of prejudice that cannot be adequately remedied by damages after the fact.
- In investor–state arbitration, interim relief may be structured to address the respondent state’s conduct and international responsibility, while avoiding a direct assertion of appellate control over domestic courts.
- Measures aimed at preventing steps that would frustrate the arbitration may be framed as obligations on the state to act within its powers to neutralize or forestall external enforcement effects pending the tribunal’s further decisions.

## Conclusion

The tribunal ordered interim measures requiring Ecuador, as the treaty respondent, to take steps to prevent the recognition or enforcement of the Lago Agrio judgment during the arbitration, based on its authority under the treaty and the UNCITRAL Rules and the risk that imminent foreign enforcement would cause irreparable prejudice and undermine the arbitration’s effectiveness.


Chevron Corp. & Texaco Petroleum Co. v. Republic of Ecuador, PCA Case No. 2009-23, Order for Interim Measures (Feb. 9, 2011)