Reinsurance Focus

Chevron Corporation and the Republic of Ecuador have been engaged in contentious litigation for nearly two decades in various courts over alleged environmental contamination of oil fields in Ecuador. An Ecuadorian court finally issued a multi-billion dollar judgment against Chevron, prompting Chevron to file for arbitration under the rules of the U.S.-Ecuador Bilateral Investment Treaty (“BIT”). For use in the BIT arbitration, Ecuador applied for ancillary discovery from an individual, John Connor, and his company, GSI Environmental, in the Southern District of Texas pursuant to 28 U.S.C.A. § 1782. Section 1782 authorizes district courts to assist discovery efforts of litigants before foreign and international tribunals, and includes private international arbitration.

The Fifth Circuit has previously held, in Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880 (5th Cir. 1999), that an international arbitration tribunal is not a “foreign or international tribunal” under § 1782. The district court, compelled by this precedent, denied the discovery request. Ecuador appealed, arguing that Chevron was judicially estopped to contend that the BIT arbitration was not an “international tribunal.” The Fifth Circuit agreed after finding that Chevron had deliberately taken inconsistent positions on the availability of § 1782 discovery” and that “if Chevron is permitted to shield itself under Biedermann against Ecuador’s current discovery request, it will have gained an unfair advantage over its adversary.” The Court thus concluded that Chevron was judicially estopped from asserting its legally contrary position and stated, “we need not and do not opine on whether the BIT arbitration is in an ‘international tribunal.’” Republic of Ecuador v. Connor, Nos. 12-20122, 12-20123, 2013 WL 539011 (5th Cir. Feb. 13, 2013).

This post written by Brian Perryman.

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