Ecuador v Occidental Petroleum and Production Co
Abstract
9 September 2005 Lord Phillips and Clarke and Mance LJJ Court of Appeal [2005] EWCA Civ 1116 [2005] ArbLR 22 Arbitration agreement--Interpretation--Applicable law--Arbitration agreement between private investor and State--Whether arbitration agreement governed by international law (yes)--Arbitration Act 1996, s 46 Arbitration award--Challenge--Jurisdiction--Award made in England under Bilateral Investment Treaty concluded between Ecuador and the United States-- Preliminary objection to application to set aside--Whether court has jurisdiction to hear challenge (yes)--Whether matters in dispute non-justiciable (no)-- Arbitration Act 1996, s 67 English court may hear challenge to award rendered under Bilateral Investment Treaty Occidental and an Ecuadorian state-owned company, Petroecuador, concluded a contract in 1999 pursuant to which Occidental obtained the exclusive right to carry out hydrocarbon exploration and exploitation the Ecuadorian Amazon basin region. Occidental assumed virtually all costs, and received in return a percentage of the oil produced and the right to export it. The percentage was determined by a `Factor X' based on an elaborate formula. This determined the amount of Occidental's production entitlement. Costs incurred by Occidental required payment of VAT. Occidental sought reimbursement from the Ecuadorian tax authority, the Servicio de Rentas Internas, which, from September 2000, began to refuse reimbursement. Occidental commenced UNCITRAL