2024-07-08 16:37:21
COUNTRY. –
The Justice Commission of the National Assembly began this Friday, July 5, to address a bill promoted by two legislators of Correa’s party, Ricardo Ulcuango and Esther Cuesta, to prohibit international arbitration in Ecuador.
This initiative comes after the results of the last popular consultation and referendum 2024 in which the Government of Daniel Noboa asked citizens whether they agreed or not to allow international arbitration in the country. Voters denied approval of this question.
Given this background, the proponents stated that, “it is necessary to harmonize national regulations with the overwhelming consensus of more than 65% of voters, according to the CNE, in rejection of this mechanism that causes irreparable damage to the environment and disastrous economic consequences for Ecuador.”
To analyze this issue, the Commission called on two lawyers: Julio Prieto and Pablo Fajardo, who was the lawyer against the Chevron case. Both agreed that international arbitration can harm the country. “… international arbitrators play by rules made by transnational companies, while the State is at a huge disadvantage,” said Fajardo.
International arbitration arises from international contractual relations between companies and States. To this end, clauses are established between the parties considering that a technical problem can be foreseen due to the different jurisdictions, says Unir.
Ecuador’s openness to international arbitration could lead to rulings against the State, which could be forced to pay millions in compensation, as already occurred in 2019, when an arbitration court determined that Ecuador had to compensate the French oil company Perenco with 471 million dollars, less a counter-compensation of 60 million for environmental damages./El Expreso