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  • Writer's pictureKirk Hartley

Chevron, Ecuador and Arbitral Power Over Courts

What do mass torts have to do with arbitration? In some instances, quite a bit. The Chevron/Ecuador/Donziger circus masks interesting and significant legal issues regarding the intersections between arbitration rulings and judicial rulings. Indeed, within the matrix group of lawsuits, there was an arbitration ruling to enjoin enforcement of a judicial judgment entered in Ecuador.

The big picture legal issues related to arbitration are the subject of an upcoming book by Michael Goldhaber, and commentary and an online symposium at Opinio Juris. This page provides the starting point, and includes the following overview comments from Michael Goldhaber:

"Having reimmersed myself in the U.S. litigation over the past few weeks, I have a few fresh thoughts to offer on the contrast between U.S. law and international investment law when it comes to controlling a foreign court dispute. Perhaps a fuller title for this brief introductory essay would be: “Chevron v. Ecuador and Chevron v. Donziger: A Comparison of U.S. and Arbitral Power Over Foreign Court Litigation.”

When U.S. appellate judges vacated the preliminary injunction of the Ecuador litigation on Jan. 26, 2012, they inadvertently put their fingers on a key difference between U.S. and international law. To American eyes like theirs, “anti-foreign-suit injunctions… bear at most a passing resemblance to the injunction that Chevron seeks” because, in the U.S., such orders are imposed only “where the same parties attempt to litigate the same underlying dispute.” Chevron v. Naranjo, at 22. But in arbitration, while the parties to the two matters are “ordinarily” identical (see p.383 n.40 of my Article), this is not strictly required for an antisuit injunction to issue. (See, e.g., CSOB v. Slovak Republic, discussed on p.380). Internationally, an antisuit injunction is often conceived more broadly as an order to preserve the status quo between the parties, rather than an order to protect the tribunal’s jurisdiction. (See pp.378 and 382). This may help to explain why the Chevron v. Ecuador tribunal was not startled by Chevron’s request — and why the oil giant got what it wanted in arbitration the day before it came up empty in U.S. court.

It’s safe to say that arbitrators claim wider power over foreign courts than U.S. courts would ever dare to, because U.S. courts would never enjoin a foreign court (as opposed to a foreign party). However, it would be an oversimplification to say that U.S. courts have abdicated all authority to control the Ecuador litigation. Injunctive relief, and conceivably declaratory relief, remain very much at issue in Chevron v. Donziger."

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