Summary

Horacio A. Grigera Naón, Doctor en Derecho

Note of Partial Dissent

1. I am unable to share the majority Arbitral Tribunal's decision in the Fourth Partial Award on Track III (the "Majority Award ") regarding the Claimants' RICO claim (the "RICO Compensation Claim") to be compensated for fees and expenses in the RICO litigation (the "RICO Litigation") that led to the RICO judgment of 4 March 2014 by the US District Court of the Southern District of New York (the "RICO Judgment"), later affirmed on 8 August 2016 by the US Court of Appeals of the Second Circuit. On 19 June 2017, the US Supreme Court denied a certiorari petition filed by the appellants.

2. Specifically having in mind the RICO Compensation Claim, I do not share certain findings and corresponding determinations or conclusions, essentially set forth in paras. 1290-1317; 1520-1522 of the Majority Award, regarding the Claimants' quantification of legal fees and costs considered as incidental fees and expenses incurred to mitigate the harm ensuing from the Respondent's international law delicts and, in particular, in connection with the denial of justice breach found, as follows, in the Arbitral Tribunal's Track II arbitral award, which entitles the Claimants to full compensation for damages sought under the RICO Compensation Claim:

C: Declarations as to the Merits

10.4 The Tribunal declares that material parts of the Lago Agrio Judgment of 14 February 2011 (as clarified by order of 4 March 2011) were corruptly `ghostwritten' for Judge Nicolás Zambrano Lozada, as a judge of the Lago Agrio Court, by one or more of the Lago Agrio Plaintiffs' representatives in return for a promise by such representative(s) to pay to Judge Zambrano a bribe from the proceeds of the Lago Agrio Judgment's enforcement by the Lago Agrio Plaintiffs;

10.5 The Tribunal declares that the Respondent, by issuing, rendering enforceable, maintaining the enforceability and executing the Lago Agrio Judgment (as also decided by the Lago Agrio Appellate, Cassation and Constitutional Courts) and knowingly facilitating its enforcement outside Ecuador, wrongfully committed a denial of justice under the standards both for fair and equitable treatment and for treatment required by customary international law under Article II(3)(a) of the Treaty;

10.6 The Tribunal declares that the Respondent is liable to make full reparation to the First Claimant and the Second Claimant for denial of justice under the standards both for fair and equitable treatment and for treatment required by customary international law under Article II(3)(a) of the Treaty; and the Tribunal rejects the defences pleaded by the Respondent;

3. According to the Majority Award, "....the Claimants' claim for the reimbursement of legal fees and expenses incurred in connection with the RICO litigation must be granted..." but only to the extent set forth by the Majority Award. In this respect, the Majority Award states that "...the fact that Chevron's choice of measures to prevent the enforcement of the Lago Agrio Judgment in its home jurisdiction was successful and effective in achieving this wholly legitimate result (....) compels the conclusion that the RICO litigation cannot be entirely excluded from compensation. The Majority Award further acknowledges that "....Chevron was defending itself against the risk of very serious harm created by the fraudulent Lago Agrio Judgment and its recognition and enforcement, including to prove the Claimants' claims before this Tribunal. Accordingly, any potential shortcomings in the reasonableness of the Claimants' choice of measures should, at most, result in a reduction of compensation of the fees and expenses incurred by the Claimants in connection with the RICO Litigation". The issue is whether it was reasonable to take affirmative action by introducing and pursuing the RICO Litigation.

4. In its critical analysis of the reasonableness of the Claimants' mitigation efforts pursued through the RICO Litigation, the Majority Award accepts that "The RICO action may not have been the most economical and efficient strategy, but does not make it an unreasonable strategy". Thus, according to the Majority Award, the reasonableness of the RICO Litigation strategy does not decisively depend on how economical or efficient it was. In parallel, the Majority Award stresses that the RICO Litigation was an inherently costly endeavor and that the Claimants failed to show the reasonableness of the costs they seek to see recognized.

5. In this connection, the following aspects of the Majority Award are to be highlighted:

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Footnotes omitted