PCA CASE NO. 2009-23

IN THE MATTER OF AN ARBITRATION BEFORE A TRIBUNAL CONSTITUTED IN ACCORDANCE WITH THE TREATY BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF ECUADOR CONCERNING THE ENCOURAGEMENT AND RECIPROCAL PROTECTION OF INVESTMENTS, OF 27 AUGUST 1993 (THE TREATY OR BIT) AND THE UNCITRAL ARBITRATION RULES 1976 BETWEEN:

1. CHEVRON CORPORATION 2. TEXACO PETROLEUM COMPANY

(both of the United States of America)

The First and Second Claimants - and -

THE REPUBLIC OF ECUADOR

The Respondent

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THIRD INTERIM AWARD ON JURISDICTION AND ADMISSIBILITY

__________________________________________________________

The Arbitration Tribunal:

Dr. Horacio A. Grigera Nan; Professor Vaughan Lowe; V.V. Veeder (President)

Administrative Secretary: Martin Doe

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TABLE OF CONTENTS

Part I: The Arbitration I.01 (A) The Parties and Other Persons .................................................................................. I.01

(B) The Arbitration Agreement ........................................................................................ I.03

(C) The Arbitration Tribunal............................................................................................ I.05

(D) Principal Written Submissions ................................................................................... I.06

(E) Procedural Meetings and the Jurisdiction Hearing .................................................. I.07

(F) The Claimants Prayer for Relief (Merits) ................................................................. I.08

(G) The Respondents Jurisdictional Objections ............................................................. I.10

Part II: The BITs Relevant Extracts II.01

2.1. The BIT....................................................................................................... II.01

2.2. Preamble .................................................................................................... II.01

2.3. Article I(1) .................................................................................................. II.02

2.4. Article 1(3) ................................................................................................. II.02

2.5. Article II(3) ................................................................................................ II.02

2.6. Article II(7) ................................................................................................ II.03

2.7. Article VI .................................................................................................... II.03

2.8. Article XI .................................................................................................... II.04

2.8. Article XII(1) .............................................................................................. II.04

Part III: The Parties Jurisdictional Disputes III.01 (A) Introduction............................................................................................................. III.01

(B) The Claimants Factual Chronology ....................................................................... III.02

3.5 1964-1972 ................................................................................................. III.02

3.6 1973 Concession Agreement ..................................................................... III.02

3.11 1992........................................................................................................... III.03

3.12 1994........................................................................................................... III.04

3.13 The 1994 MOU ......................................................................................... III.04

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3.16 The 1995 Scope of Work ........................................................................... III.05

3.17 The 1995 Settlement Agreement ................................................................ III.05

3.20 1995-1998 ................................................................................................. III.05

3.23 The 1996 Municipal and Provincial Releases .......................................... III.06

3.25 The BIT...................................................................................................... III.07

3.26 The 1998 Final Release ............................................................................ III.07

3.27 The Aguinda Litigation ............................................................................. III.07

3.32 Texacos Jurisdictional Consent ............................................................... III.09

3.34 The Lago Agrio Litigation ........................................................................ III.10

3.39 The BIT Claims ......................................................................................... III.11

(C) The Respondents Objections to Jurisdiction .......................................................... III.12

3.42 Factual Introduction ................................................................................. III.12

3.56 Jurisdictional Objections .......................................................................... III.16

3.57 (i)-(iii) Ratione Materiae .......................................................................... III.16

3.58 (iv) Fork in the Road ................................................................................. III.16

3.59 (v) Third Party Rights ............................................................................... III.16

3.61 (i) Article VI(1)(c) ..................................................................................... III.16

3.72 (ii) Article VI(1)(a) .................................................................................... III.20

3.75 (iii) Prima Facie Case .............................................................................. III.21

3.79 (iv) The Fork in the Road .......................................................................... III.22

3.83 (v) Third Party Rights ............................................................................... III.23

3.86 Jurisdictional Relief Sought by the Respondent ........................................ III.24

(D) The Claimants Response ......................................................................................... III.25

3.88 Preliminary Statement .............................................................................. III.25

3.91 Response to Jurisdictional Objections ...................................................... III.26

3.92 (i) The Prima Facie Standard ................................................................... III.26

3.97 (ii) Res Judicata/Issue Preclusion ............................................................ III.27

3.100 (iii) Privity and Non-Parties ..................................................................... III.28

3.105 (iv) Article VI(1)(c) ................................................................................... III.30

3.113 (v) Article VI(1)(a) .................................................................................... III.33

3.126 (vi) Third Party Rights .............................................................................. III.37

3.129 (vi) Fork in the Road ................................................................................. III.38

3.136 Jurisdictional Relief Sought by the Claimants .......................................... III.40

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(E) The Respondents Reply .......................................................................................... III.41

3.138 Introduction............................................................................................... III.41

3.139 Reply to the Claimants Response ............................................................. III.41

3.140 (i) The Standard of Review ....................................................................... III.42

3.143 (ii) Article VI(1)(c) .................................................................................... III.42

3.166 (iii) Article VI(1)(a) ................................................................................... III.49

3.173 (iv) Res Judicata/Issue Preclusion ............................................................ III.51

3.176 (v) Estoppel/Preclusion ............................................................................. III.51

3.178 (vi) Third Party Rights .............................................................................. III.52

3.182 (vii) Fork in the Road ................................................................................ III.53

(F) The Claimants Rejoinder ........................................................................................ III.55

3.188 Preliminary Statement .............................................................................. III.55

3.189 Rejoinder to the Respondents Reply ........................................................ III.55

3.190 (i) The Standard of Review ....................................................................... III.55

3.193 (iii) Mischaracterised Facts ...................................................................... III.56

3.197 (iv) Res Judicata/Issue Preclusion ............................................................ I