War-Gaming the Chevron Battle to End All Battles
In this column, I will explain how I see the global dispute playing out. Hint: Before the curtain falls, the oil company wins.In its showdown with Ecuador, Chevron argues that the state oil company, PetroEcuador, bears heavy responsibility for ongoing pollution...[S]tates and investors don't allocate future liability in their investment agreements based on who is most responsible, or who is in the best position to minimize the risks.They do so based on bargaining power and political influence...[T]he human rights litigation was effectively removed from U.S. to Ecuadorean courts, which are alleged to be corrupt and politicized...Chevron has raised myriad due process concerns through U.S. discovery. If the judgment was procured by fraud and is untethered to the evidence, then it cannot advance human rights, regardless of whether it is ultimately paid by Chevron or Ecuador...Assuming the arbitrators order Ecuador to indemnify Chevron, do you really think Ecuador will let that $18 billion judgment stand? Ecuador's appeal courts can simply overturn the judgment. Or perhaps even likelier: The appeals courts can reduce the judgment to a relatively token amount.