Originally from Journal of Damages in International Arbitration

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I.  INTRODUCTION

On February 10, 2017, an arbitral tribunal composed of Professor Bernard Hanotiau (Presiding Arbitrator), Professor Kaj Hobér, and Mr. Yves Derains issued a Final Award in Murphy Exploration & Production Company – International v. The Republic of Ecuador.  This decision followed the Tribunal’s Partial Final Award issued on May 6, 2016.  In the Partial Final Award, the Tribunal found that the Respondent had violated the fair and equitable treatment (“FET”) provision of the Treaty Between the United States of America and the Republic of Ecuador Concerning the Encouragement and Reciprocal Protection of Investment, signed on August 27, 1993 (the “U.S.-Ecuador BIT” or “BIT”), based on its unlawful imposition of a 99% participation in extraordinary income generated by Claimant and its consortium partners.  The Tribunal awarded the Claimant USD 19,971,309.00 for damages incurred for payment of the wrongful levy plus pre-award interest in the amount of USD 7,136,121.00.   The Partial Final Award also ordered Ecuador to make an additional payment to Claimant which it called an “Entitlement” payment.   The Tribunal was not able to calculate the Entitlement payment at the time of the Partial Final Award.  After considering arguments from both Parties, the Tribunal determined in the Final Award that no additional compensation would be awarded to Claimant.