DJ Ecuador's Fin Min: Won´t Accept Future ICSID Jurisdiction
QUITO (Dow Jones)--Ecuador has notified the World Bank's International Center for Settlement of Investment Disputes, or ICSID, that it won't accept its jurisdiction as a mediator in future disputes, Foreign Minister Maria Fernanda Espinosa said Thursday.
"The ICSID is an artificial instance of international arbitration. Fifteen days ago, as a sovereign nation, Ecuador_-76_s government notified it that it won't accept its jurisdiction," the foreign minister told reporters at a press conference.
According to Espinosa, this means that ICSID won't be able in the future to resolve conflicts regarding investments or exploitation of nonrenewable resources between Ecuador and private companies.
He said the government's decision isn't retroactive and current processes in arbitration at the ICSID will continue.
The ICSID has been an alternative for oil companies seeking redress in disputes with the Ecuadorian government since the 1980s.
The ICSID is currently handling a request for arbitration over a dispute between Ecuador and U.S.-based Occidental Petroleum Corp. (OXY).
The Andean country canceled Occidental's contract on May 15, 2006, accusing the company of violating its terms, particularly in transferring, without proper authorization, a 40% stake to Canada's EnCana Corp. (ECA).
In addition, oil company City Oriente, which does business in Ecuador but is backed by U.S. investors, entered into arbitration with the ICSID in October 2006 over a dispute, saying Ecuador needs to respect its contract terms.
In the past, several other oil companies also have turned to arbitration to seek a solution to their tax disputes, including requests for tax refunds.
-By Mercedes Alvaro, Dow Jones Newswires; 59-39-9728-653; mercedes.alvaro@dowjones.com
(END) Dow Jones Newswires
November 29, 2007 16:29 ET (21:29 GMT)
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