Friday, February 15, 2013

Republic Of Ecuador v. Chevron

Feb 13: In the U.S. Court of Appeals, Fifth Circuit, Case Nos. 12-20122, consolidated with 12-20123. Appealed from the United States District Court for the Southern District of Texas. The Republic of Ecuador (Appellant) seeks discovery from Appellees John Connor and GSI Environmental, his company, for use in a foreign arbitration against Chevron. During the course of extended litigation with Ecuador, Chevron, an intervenor in the district court, has benefitted repeatedly by arguing against Ecuador and others that the arbitration is a "foreign or international tribunal." Because Chevron's previous positions are inconsistent with its current argument, judicial estoppel is appropriate to make discovery under § 1782 available to Ecuador. The Appeals Court reversed the decision of the district court and remanded the case "for determination of the scope of discovery."
    By was of background the Appeals Court explains, Chevron, as successor to Texaco, became embroiled in litigation over the alleged environmental contamination of oil fields in Ecuador. The litigation spans nearly two decades and dozens of courts. A court in Lago Agrio, Ecuador finally issued a multi-billion dollar judgment against Chevron. Chevron filed for arbitration under the rules, as allowed by the US-Ecuador Bilateral Investment Treaty (BIT). Chevron charged that miscarriages of justice in the Ecuadorian courts and participation by Ecuador in the plaintiffs' fraud violated its rights. Ecuador applied to the district court for ancillary discovery from Appellees for use in the arbitration and Chevron intervened to protect its interests.
    According to the Appeals Court, the district court, felt compelled by prior Fifth Circuit decisions to deny Ecuador's discovery request. Following those cases, the court concluded, the BIT arbitration represents a bilateral investment dispute that is not pending in a "foreign or international tribunal" as the statute requires.
    The Appeals Court concludes, "Chevron has deliberately taken inconsistent positions on the availability of § 1782 discovery for use in 'international tribunals.' Chevron successfully obtained such discovery by persuading courts to reject Ecuadorian (and related parties') objections and by contending, opposite to its current position, that the BIT arbitration is an 'international tribunal.' Finally, if Chevron is permitted to shield itself under Biedermann against Ecuador's current discovery request, it will have gained an unfair advantage over its adversary. Chevron should be judicially estopped from asserting its legally contrary position here. Consequently, we need not and do not opine on whether the BIT arbitration is in an 'international tribunal.' On remand, the district court should proceed in its discretion to evaluate Ecuador's request for discovery pursuant to § 1782."
    Access the complete opinion (click here). [#Remed, #CA5]
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