Ecuador will fight not to pay Occidental in oil dispute

10/15/2012

Ecuador will fight not to pay Occidental in oil dispute

BY MERCEDES ALVARO

QUITO -- Ecuador's President Rafael Correa said over the weekend that his government will fight not to pay Occidental compensation that was ordered by an international tribunal for canceling a contract in 2006.

We will continue fighting to not pay any penny from the Ecuadorean people to this abusive transnational company that tried to defraud the country, Mr. Correa said during his weekly media address.

Ecuador canceled Occidental's operating contract in May 2006, alleging that the company broke its terms by transferring a 40% stake to Encana without obtaining approval from the country's energy ministry.

Occidental filed for arbitration with the Icsid, under the Ecuador bilateral investment treaty. Early this month Icsid released a ruling, ordering Ecuador to pay Occidental $1.77 billion, plus pre and post award interest.

Last week Ecuador filed an appeal to overturn the Icsid ruling, arguing Icsid has no jurisdiction in the case. We won't allow that this money leaves from the country, Mr. Correa said.

Mr. Correa said the United States Company broke its contract and the Ecuadorean law. Ecuador expects the process of trying to overturn the Icsid ruling could take one to two years.

Dow Jones Newswires

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