A panel of international arbitrators has agreed that it has jurisdiction to consider Chevron Corp.'s claim against the government of Ecuador concerning an $18 billion judgment against the oil company.

Chevron claims that the judgment entered by an Ecuadorean judge last year over oil contamination in the eastern part of the country, which was later upheld by an appeals court, should not be recognized by foreign courts.

The alleged pollution was caused by Texaco Petroleum Corp. between the mid-1960s and early 1990s. Chevron acquired Texaco in 2001.

The arbitration panel is considering a 2009 claim brought by Chevron against Ecuador in which the oil company claims the Andean nation violated a bilateral trade agreement between it and the United States (Greenwire, Feb. 10).

Chevron wants the Ecuadorean government to foot the bill for anything it has to pay out to the 30,000 plaintiffs, citing in part agreements that Texaco made with the government before it left the country.

The panel's decision, announced yesterday, means the arbitrators will now move to the merits of Chevron's claims against Ecuador.

The arbitration proceeding is one of three strands of litigation being pursued by Chevron.

It is also pursuing an appeal to Ecuador's highest court and has filed a racketeering suit in New York accusing the American lawyers who represent the plaintiffs of spearheading a fraudulent enterprise.

Click here to read E&E's special report on the litigation.