INVESTMENT TREATY ARBITRATION: Undue delay in domestic courts found to violate BIT

Tuesday, 22 June 2010

In a partial award on the merits in Chevron-Texaco v Ecuador, the tribunal held that a bilateral investment treaty provision requiring Ecuador to provide effective means for investors to assert and enforce their rights constituted a lex specialis distinct from customary international law in relation to denial of justice. The standard, which is found in the Energy Charter Treaty as well as a number of BITs, was held to have been violated as a result of the Ecuadorean courts’ undue delay in bringing seven cases from the 1990s to a close. Matthew Weiniger and Ruth Byrne of Herbert Smith LLP report.

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