## Facts

- Chevron’s predecessor entered a 1973 agreement with Ecuador to develop oil fields in exchange for supplying oil to the government at below-market prices.
- The agreement expired in 1992; Chevron pursued breach-of-contract claims in Ecuadorian courts alleging underpayment, which remained unresolved for years.
- In 1995, the parties executed a settlement terminating rights and obligations under the 1973 agreement while allowing the pending Ecuadorian lawsuits to continue.
- The United States and Ecuador signed a Bilateral Investment Treaty (BIT) in 1993; it entered into force in 1997 and included Ecuador’s standing offer to arbitrate qualifying investment disputes for monetary damages.
- In 2006, Chevron initiated BIT arbitration alleging Ecuador violated the “effective means” obligation by failing to resolve Chevron’s domestic suits.
- The arbitral tribunal rejected Ecuador’s jurisdictional objections, found Ecuador liable, and awarded Chevron about $96 million plus interest.
- Ecuador sought set-aside relief in Dutch courts at the seat of arbitration; the District Court of The Hague, the Hague Court of Appeal, and the Dutch Supreme Court upheld the award.
- Chevron petitioned a federal district court in Washington, D.C. to confirm the award under the New York Convention and the Federal Arbitration Act; Ecuador moved to dismiss on FSIA immunity and opposed confirmation.
- The district court found jurisdiction under the FSIA arbitration exception, declined de novo reconsideration of the tribunal’s jurisdiction, and confirmed the award.

## Issues

1. Whether the FSIA arbitration exception, 28 U.S.C. § 1605(a)(6), supplied subject-matter jurisdiction over a petition to confirm a BIT arbitration award against a foreign state.
2. Whether the court had to decide arbitrability and treaty-scope questions de novo, notwithstanding the tribunal’s jurisdictional ruling.
3. Whether enforcement should be refused under New York Convention Article V because the dispute fell outside Ecuador’s consent to arbitrate or because enforcement would violate U.S. public policy.

## Decision

- The D.C. Circuit affirmed confirmation of the arbitral award.
- The court held the FSIA arbitration exception applied because Chevron made a prima facie showing of a qualifying arbitration agreement and covered award, and Ecuador did not defeat that showing.
- The court held the district court properly gave substantial deference to the tribunal’s jurisdictional determinations when enforcing the award under the New York Convention.
- The court rejected Ecuador’s Article V defenses, including the public policy objection, and left intact judgment for Chevron for approximately $96 million plus interest.

## Legal Principles

- Under the FSIA, foreign states are immune absent an exception; the arbitration exception applies in an action to confirm an award made pursuant to a Convention-covered agreement to arbitrate.
- For FSIA jurisdiction under the arbitration exception, the petitioner must make a prima facie showing of a qualifying arbitration agreement and award; the burden then shifts to the sovereign to show the exception does not apply.
- Objections that a dispute is outside the scope of consent to arbitrate generally do not defeat FSIA jurisdiction when a Convention-covered arbitration agreement is shown; they are addressed through New York Convention enforcement standards.
- In Convention enforcement proceedings, courts do not retry the tribunal’s jurisdictional analysis; substantial deference is appropriate where the tribunal addressed jurisdictional objections and rendered a reasoned determination.
- New York Convention Article V defenses are construed narrowly; refusal on public policy grounds requires a strong, explicit, and well-defined U.S. public policy that would be violated by enforcement.

## Conclusion

The D.C. Circuit held that Chevron’s showing of a BIT-based agreement to arbitrate triggered the FSIA arbitration exception and that Ecuador’s scope and public policy objections did not justify refusing enforcement under the New York Convention, so the arbitral award was confirmed.


Chevron Corp. v. Republic of Ecuador, 795 F.3d 200 (D.C. Cir. 2015)