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Saturday, September 13, 2008

Oxy case to continue in World Bank court

QUITO, Sept 10 (Reuters) - A World Bank court has denied a petition by Ecuador to drop a $3.2 billion claim filed by Occidental Petroleum, the country's top attorney said on Wednesday.

The ruling highlights growing risk of monetary liability for the leftist government next year.

Inspector General Diego Garcia said the World Bank's International Centre for Settlement of Investment Disputes denied Ecuador's petition for that court to drop the suit because it lacks jurisdiction to rule on the case.

"The tribunal's decision ... ends the discussion about jurisdiction," Garcia told reporters in Quito, adding that a final ruling is expected by mid-2009. "We will now concentrate on our defense."

Occidental's claim against Ecuador seeks $3.2 billion in damages after the OPEC-member nation ended its oil extraction contract and seized the company's assets in 2006.

The government charges Occidental sold part of an oil block without state authorization, a claim the company dismissed.

Ecuadorean President Rafael Correa, a leftist economist who wants to boost state control over the economy and natural resources, has accused the bank's court of protecting the interests of private companies based in rich nations.

Ecuador has said it will not recognize the court's jurisdiction in case of a negative ruling, but will continue its defense.

An Occidental spokesman was not immediately available for comment.

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