QUITO -(Dow Jones)- Ecuador will request the annulment of a ruling ordering it to pay $700 million in compensation to Chevron Corp. (CVX), President Rafael Correa said over the weekend.
"We are going to look to nullify this monstrosity," Correa said in his weekly speech to the country.
The Permanent Court of Arbitration at The Hague ruled last Tuesday that Ecuador must pay Chevron Corp. up to $700 million because the country's courts took too long to rule on lawsuits originally filed by Texaco Inc. between 1991 and 1993. Chevron acquired Texaco in 2001. The lawsuits were related to the past oil operations of Texaco in Ecuador.
Correa said Chevron is trying to discredit Ecuador because the company is worried about another, unrelated, environmental lawsuit brought against it by residents of Ecuador's oil-producing Amazon region.
The long-running environmental dispute, in which plaintiffs sued Texaco for causing environmental damage and health problems, allegedly happened decades ago. In the dispute Chevron is accused of having used out-of-date technology that caused the environmental damage. Chevron denies the accusations.
A court-appointed expert has estimated Chevron's liability in this case to be $27 billion. Chevron has challenged the expert's qualifications.
In his address Correa also said he will request the Union of South American Nations, or Unasur, to unite against multinational companies like Chevron.