The Ecuadorian government will have to face a millionaire sum after the verdict was handed down by a panel set up under the auspices of the International Center for Investigation (ICSID) to settle investment disputes with the World Bank.
On May 28, the event rejected Ecuador’s attempts to cancel an award that would benefit oil company Perenco. The decision has already been notified to the state.
The state of Ecuador and the oil company have been at loggerheads since the enactment of Rule 42, which increased the state’s use of Perenco’s participation in Blocks 7 and 21.
The change came in 2007 when the state’s share of oil surpluses increased from 50% to 99%.
Perenko has accused Ecuador of violating a bilateral investment agreement signed with France.
Execution Order No. 662 of October 4, 2007 ruled that Perenco violated public and international law to the detriment of the oil company.
Ecuador has demanded the cancellation of the award in the Perenco case
Following the decision taken at the end of May this year, Ferranco considered “a significant and decisive victory in its protracted dispute against the Republic of Ecuador.”
In September 2019, Berenco received a final award, proving its rights by awarding compensation for its major claims and post-award interest and nearly 80% of its costs.
The oil company says it has promised to present the award to Ecuador’s Perenko within 60 days of the ICSID committee’s decision.
“Berenco hopes that Ecuador’s Minister of Economy and Finance and its Attorney General will comply with this condition before the ICSIT Notification Committee, unconditionally, voluntarily and in full, within 60 days,” Mark W said. Friedman is co-chair of the International Dispute Resolution Committee at Deboys & Plimpton and a leading adviser to Perenko.
The oil company said any breach would “undermine Ecuador’s commitment to boost Ecuador’s economy, attract foreign investment and protect Ecuador’s creditworthiness in the international community.”
Ecuador has 120 days to cancel the arbitration award with Perenco Oil
Guillermo Lasso’s government pointed out that the same court had recognized that the state of Ecuador has the right to compensate for environmental damage.
4 374’373,154.25, and interest after deducting the environmental compensation in favor of the Ecuadorian company, the final amount to be paid by the Government in favor of Perenko. Perenko’s original claim was 42 1.42 billion.
Perenko estimated the compensation he would receive was $ 412 million.
“The Ecuadorian government respects and respects its international obligations, despite any legal contradictions expressed in this process. Liaison will be maintained with the agency to find alternative solutions,” the government pointed out.
He also announced that he would request the competent authorities to initiate repeated action against the responsible government employees and officials. (I)