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ARTICLE · 28 JULY 2006

The Occidental Tourist – Expropriation Claim Tests BIT Efficacy

Blake, Cassels & Graydon LLP
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Occidental Petroleum Corporation (Occidental) filed a request on May 17, 2006 for arbitration claiming USD 1 billion in damages under the Ecuador-U.S. bilateral investment treaty (BIT). The request came two days after Ecuador unilaterally cancelled Occidental’s contracts and assumed control of its oil and gas operations in the country. Occidental claims that the cancellation and additional taxes recently imposed on oil revenues amount to an expropriation of its investment.

CanadaLitigation, Mediation & Arbitration
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This article was originally published in Blakes Bulletin on International Trade, July 2006

Article by Ken Purchase, ©2006 Blake, Cassels & Graydon LLP

The outcome of Occidental Petroleum’s latest dispute with Ecuador will be an important test of the effectiveness of BITs in protecting overseas investor rights in volatile political climates.

Occidental files arbitration request over cancelled contracts

Occidental Petroleum Corporation (Occidental) filed a request on May 17, 2006 for arbitration claiming USD 1 billion in damages under the Ecuador-U.S. bilateral investment treaty (BIT). The request came two days after Ecuador unilaterally cancelled Occidental’s contracts and assumed control of its oil and gas operations in the country. Occidental claims that the cancellation and additional taxes recently imposed on oil revenues amount to an expropriation of its investment. For its part, the Ecuadorian government claims that the contracts were cancelled because Occidental breached

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