After 15 years, the oil company Perenco won an international judicial process against Ecuador, derived from the imposition of Law 42, which unilaterally and illegally increased the State’s utility in Perenco’s participation contracts in Blocks 7 and 21.
In a statement, the oil company recalls that, in September 2019, Perenco obtained a final award that vindicated its rights by awarding it compensation of $ 448 million for its main claims, plus post-Award interest and almost 80% of its costs.
Following this decision, Ecuador requested its annulment. The State Attorney General’s Office claimed that there are sufficient reasons to justify the request for annulment.
They argued that the Arbitral Tribunal has exceeded its powers, that its award lacks sufficient reasons and that it has seriously violated express procedural norms.
However, on May 28, 2021, a committee constituted under the auspices of the International Center for Settlement of Investment Disputes of the World Bank (ICSID Committee) rejected Ecuador’s attempts to annul the award in its entirety.
The ICSID Committee reduced the award due to Perenco for its main claims plus post-Award interest and costs to $ 412 million, and ratified the remainder of the Award.
The Anglo-French oil company clarified that Ecuador undertook to pay this amount within 60 days of the ICSID Committee’s decision. They explain that there was, in April 2020, a commitment on the part of the then Minister of Economy and Finance, Richard Martínez, and the Attorney General, Íñigo Salvador, to “pay the Award unconditionally, voluntarily and in full, within a period of 60 days from the decision of the Committee on the request for annulment, without such payment being subject to procedures of compulsory execution or the intervention of the Ecuadorian Courts ”.
Perenco hopes that the Government of Guillermo Lasso will fulfill the commitment to pay this amount in the agreed terms.
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