Investment Treaty Arbitration

Investment Treaty Arbitration: Ecuador

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Ecuador

BIT Contracting Party or MIT

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration 2

Argentina

(1 December 1995)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Bolivia

(15 August 1997)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Canada

(6 June 1997)

Yes

Yes

Yes

Yes

No

6 months

Yes 3

Yes

Chile

(2 January 1996)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

China

(1 July 1997)

Yes

Yes

Yes

Yes

No

6 months

Yes

Amount of compensation in case of Expropriation

Costa Rica

(not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Cuba

(1 June 1998 / terminated)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Dominican Republic

(4 November 2006 / terminated)

No 4

Yes

Yes

Yes 5

No

6 months

No

Yes

El Salvador

(14 January 1995 / terminated)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Finland

16 December 2001 / terminated)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

France

(10 June 1996)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Germany

(12 February 1999)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Guatemala

(4 June 2005 / terminated)

BIT not available

             

Honduras

(24 December 2006 / terminated)

No6

Yes

Yes

Yes 5

No

6 months

Yes

Yes

Italy

(26 May 2005)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Netherlands

(1 July 2001)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Nicaragua

(9 September 2002 / terminated)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Paraguay

(18 September 1995 / terminated)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Peru

(10 December 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Romania

(18 July 1997 / terminated)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Russian Federation

(not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Spain

(18 June 1997)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Sweden

(1 March 2002)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Switzerland

(9 November 1969)

Yes

Yes

Yes

Yes

No

No

No

No 7

United Kingdom of Great Britain and Northern Ireland 8

(24 August 1995)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

United States

(11 May 1997)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Uruguay

(31 July 1985 / terminated)

BIT not available

             

Venezuela

(1 February 1995)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Ecuador

Issue

Distinguishing features in relation to the definition of ‘investor’

Seat of the investor / place of business

While most Ecuadorean investment treaties provide that a juridical person incorporated or duly organised under the laws of a contracting party qualify as an ‘investor’, some treaties also require that such entities have their substantive business operations / real economic activities (Chile, El Salvador, Nicaragua, Dominican Republic, Romania) and/or their seat (Germany, Canada9, Argentina, Bolivia, China, Chile, Cuba, El Salvador, Spain, Finland, France, Costa Rica, Honduras, Italy, Nicaragua, Peru, Dominican Republic, Romania, Sweden, Switzerland10, Paraguay, Venezuela, United Kingdom11) within the territory of a contracting party.

Types of entities included in the definition

Ecuadorean BITs protect entities with legal personality. Unincorporated entities and grouping will not, in general, enjoy legal protection, although a treaty may provide otherwise like the one with Germany and the one with Switzerland.12 These two BITs explicitly specify that they cover entities without legal personality.

Legal persons controlled by nationals of the Contracting Party

Some BITs extend protection to juridical persons that are not constituted under laws and regulations of a contracting party but are controlled, directly or indirectly, by a national or a juridical person of that contracting party (France13, Netherlands, Paraguay, Sweden, Switzerland, United States, Dominican Republic).

Denial of benefits

The BIT with the United States contains a denial of benefits clause under which the Contracting Parties reserve the right to deny the benefits of the treaty to a company that does not have an economic connection to the state on whose nationality it relies.14

Three BITs (Argentina, Chile and Venezuela) include a denial of benefits to investments made by natural persons who are nationals of a contracting party in the territory of the other contracting party if such persons, at the time of investment, have been domiciled for more than two years in this contracting party, unless it is proved that the investment was admitted into the territory from abroad.

Two BITs (El Salvador and Nicaragua) include a denial of benefits to investments made by natural persons who are nationals of a contracting party in the territory of the other contracting party if such persons, at the time of investment, have been domiciled for more than five years in this contracting party, unless it is proved that the investment was admitted into the territory from abroad.

Nationality of natural persons

The law of the contracting party determines an individual’s nationality. ‘Investor’ is typically defined to include persons having the citizenship or nationality of a contracting party. In some cases (Canada) the definition includes any natural person who has citizenship or status as a permanent resident (regardless of their nationality).15 In other cases (Cuba), this definition requires both standards: the investor must be a citizen of the contracting party and have a permanent residence in its territory.16 

The BIT with Germany provides that, without prejudice to other procedures for determining nationality, any person who holds a passport issued by the competent authorities of the contracting party shall be deemed as a national of that contracting party.17 

Dual citizenship

The Canadian BIT determines that investors of Ecuador cannot hold the citizenship of Canada (no mutual restriction for investors of Canada).18 

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Ecuador

Issue

Distinguishing features in relation to the concept of ‘investment’

Open-ended definition

Ecuadorean BITs adopt an open-ended approach by referring to ‘every kind of asset’ and by including an illustrative list of categories of investment, eg: ‘Investment’ means every kind of asset […] including, in particular, though not exclusively…’.

Assets which qualify for protection

Ecuadorean investment treaties list different categories of assets, which typically include:

(a) Movable and immoveable property as well as any other rights in rem, such as mortgages, liens and pledges;

(b) Shares of companies and other kinds of company interests;

(c) Claims to money or to any performance having an economic value; 19 

(d) Intellectual property rights; 20 and

(e) Business concessions, including concessions to search for, extract and exploit natural resources.

The treaties also include returns and/or their reinvestment under their scope of protection.

The BIT with Italy lists a number of specific activities that qualify as investments. 21 

The Canadian BIT specifically includes financial services as investments protected under the treaty 22 .

Many BITs protect the guarantees or payments given by a contracting party to their national (natural or legal person) in respect of an investment in the territory of the other Contracting Party. Under this subrogation the contracting party recognises the rights over the transfer of any title of such an investor to the former contracting party (Argentina, Bolivia, Chile, China, Costa Rica, Cuba, Canada, El Salvador, Spain, Finland, Honduras, Italy, Nicaragua, Netherlands, Peru, United Kingdom, Dominican Republic, Sweden, Venezuela, Netherlands, Paraguay, Romania and Germany). BITs like the one with France determine that the recognition of subrogation shall be applied on a case-by-case basis pursuant to the Contracting Party’s criteria. 23 

Directly or indirectly controlled by the investor

Some BITs provide that the investment may be owned or controlled by the investor directly or indirectly (Canada, United States, France, Honduras, Peru and Sweden).

Commencement of coverage

Ecuadorean BITs protect all existing investments, including those made before the entry into force of the treaty.

Territorial coverage

Most of the treaties expressly state that they cover the entire territory under each State’s sovereignty as well as the maritime zones where a State exercises sovereign rights in accordance with international law (Germany 24 , Argentina, Bolivia, Canada, Chile, Costa Rica 25 , Cuba, El Salvador, Honduras, Italy, Nicaragua, Peru, Dominican Republic, Romania and Venezuela).

Other treaties such as the ones with France 26 and Finland 27 simply state that they cover investments of those Contracting Parties’ nationals or companies in Ecuador and investments of Ecuadorian nationals and companies made in such dtates, without particularising each contracting party’s territorial coverage. There has been a discussion regarding the application of the United Kingdom treaty to overseas territories, however the BIT just refers to United Kingdom nationals.

The BIT with the United States explicitly provides that the Treaty applies to the political subdivisions of the contracting parties.

Accordance with local laws

Most Ecuadorean BITs provide that an investment must be made in accordance with the national and international laws and regulations of the host State (Germany 28, Argentina, Bolivia, Canada, Chile, China, Costa Rica, Cuba, El Salvador, Spain, France, Honduras, Italy, Nicaragua, Paraguay, Peru, United Kingdom, Dominican Republic, Romania, Sweden, Switzerland, Venezuela, United States).

Change in the form of an investment

Many Ecuadorean investment treaties explicitly clarify that changes in the form of an investment does not affect its status under the treaty, so long as it still satisfies the corresponding definition (Germany, Argentina, Bolivia, Canada, Chile, Costa Rica, El Salvador, United States, Finland, France, Honduras, Italy, Nicaragua, Netherlands, Peru, United Kingdom, Dominican Republic, Romania, Sweden, Venezuela).

Exclusion of certain assets or transaction from the definition

The Canadian BIT explicitly excludes:

‘Real estate or other property, tangible or intangible, not acquired in the expectation or used for the purpose of economic benefit or other business purposes’.

Investments in cultural industries are exempted from the provisions of the BIT. 29 

The contracting parties reserve the right to make exceptions in a number of sectors and matters. 30 

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Ecuador

Issue

Distinguishing features of the fair and equitable treatment standard

Illustration of the FET standard

Almost all Ecuadorean investment treaties – except for the BITs with Honduras and Dominican Republic – simply provide that each contracting party shall accord fair and equitable treatment to investments.31 

The BITs with Honduras and Dominican Republic refer to ‘fair, equitable and favourable conditions’ and ‘fair and equitable treatment’ in their Preamble only.

Principles of International Law

Fair and equitable treatment must be ensured in accordance with ‘principles of international law’ (Canada, France, Venezuela and United States).

Non- impairment

BITs impose upon contracting party an obligation not to impair the management, maintenance, use, enjoyment or disposal of investments through ‘unreasonable or discriminatory treatment’ / ‘arbitrary and discriminatory measures’/‘unreasonable or discriminatory measures’ (Germany, Argentina, Bolivia, Chile, Costa Rica, Cuba, El Salvador, Finland, Honduras, Italy, Nicaragua, Netherlands, Paraguay, Peru, United Kingdom, Romania, Sweden, Switzerland, Venezuela, Spain, Dominican Republic and United States).

The French BIT provides that the right to enjoy fair and equitable treatment must not be hindered in fact or law. The treaty defines such interferences in article 4.

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Ecuador

Issue

Distinguishing features of the ‘expropriation’ standard

Indirect expropriation

Most of Ecuador’s treaties cover indirect expropriations by prohibiting measures ‘tantamount to expropriation’ (Germany, Argentina, Bolivia, Canada, Chile, China, Costa Rica, Cuba, El Salvador, Spain, Finland, Honduras, Italy, Nicaragua, Paraguay, Peru, United Kingdom, Dominican Republic, Romania and Venezuela).

Certain treaties include an explicit reference to ‘measures depriving indirectly’ or ‘expropriated directly or indirectly’ (United States, France, Italy, Netherlands, Sweden, Switzerland, and Paraguay).

Conditions for expropriation

Most Ecuadorean treaties offer protection against expropriation unless the measures are taken in the public interest on a non-discriminatory basis and under due process of law (Argentina, Bolivia, Canada, Costa Rica, Cuba, El Salvador, Chile, Spain, Finland, United States, France, Honduras, Italy, Nicaragua, Netherlands, Paraguay, Dominican Republic, Romania, Venezuela, Sweden and Peru32). The treaties with Switzerland, Germany and the United Kingdom only refer to the public interest condition but do not explicitly refer to the other two standards: non-discriminatory basis and due process.

Certain BITs have unique provisions. The BIT with China specifically provides conditions for expropriations: (a) declaration of public interest, (b) pursuant to an internal legal process, (c) without discrimination, (d) in exchange of fair compensation.

The BIT with United States specifies that expropriation and compensation should follow the international law standards.33 

Valuation date

As a general rule, Ecuadorean BITs require that the investor be provided with compensation equivalent to the value of the expropriated asset immediately before the expropriation effectively took place or the time in which it was publicly known (whatever is earlier). Only two treaties refer solely to the moment when expropriation took place and omit the time when the expropriation was publicly known (China and Switzerland).

Calculation of compensation

Such compensation shall represent fair market value (Finland, United States, Sweden), market value (Honduras, Germany, Argentina, Bolivia, Chile, Cuba, El Salvador, Italy, Nicaragua, Paraguay, United Kingdom, Dominican Republic, Romania, Venezuela), genuine value (Netherlands and Canada), real value (France), fair value (Costa Rica, Peru), value (China) of the investment affected.

Prompt, adequate and effective compensation

The compensation should be prompt, adequate and effective (Argentina, Bolivia, Canada, Chile, Costa Rica, Cuba, El Salvador, Finland, Honduras, United States, Italy34 , Nicaragua, Peru, United Kingdom, Dominican Republic, Romania, Sweden, Switzerland, Venezuela); ‘fair and adequate’ (France), ‘effective and adequate’ (Switzerland), ‘just compensation’ (Netherlands and Paraguay), ‘immediate, complete and effective’ (Italy), ‘adequate’ (Spain), and fair (China).

The BIT with Switzerland determines that such compensation should be consistent with the jus gentium.

The Chinese treaty establishes that the compensation should be paid ‘without undue delay’. The Italian BIT adds ‘without undue delay and in any case within two months’.

Payment shall be made without delay, transferable and in a freely convertible currency (China, Spain, United States, France, Netherlands, Paraguay, United Kingdom, Romania, Switzerland, Venezuela, Germany, Argentina, Bolivia, Cuba and Honduras).

Applicable interest

Such compensation shall include interest depending on the applicable law. If Ecuadorian law is applicable, the interest rates are determined by the Ecuadorian Central Bank, and there is a legal prohibition to apply compound interest.

Commercial banking rate (Honduras, Germany and Paraguay).

Commercial market rate (Finland, Bolivia, France Peru, Sweden, Argentina, Canada, Chile, Cuba, El Salvador, United States, Nicaragua, United Kingdom, Romania, Venezuela, Netherlands)35 

EURIBOR rate at six months from the date of expropriation until the date of payment (Italy).36 

Review by judicial and administrative authorities

A number of BITs recognise to investors the right to a review by judicial or administrative authority of the legality of expropriation and/or the amount of compensation (Germany, Argentina, Bolivia, Chile, Costa Rica, Canada, El Salvador, Finland, United States 37, France, Honduras, Italy, Nicaragua, Peru, Dominican Republic, Venezuela, United Kingdom, Romania).

Links with other protections

The German BIT determines that the most-favoured-nation treatment shall apply to the section of expropriation.

The treaty with Italy provides that if the investor and the responsible authority fail to reach an agreement on the amount of compensation, such amount will be determined pursuant to the procedures for the resolution of disputes between the contracting party and investors provided by the treaty.

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Ecuador

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Illustration of the national treatment/most-favoured-nation treatment

Most Ecuadorian investment treaties simply provide that each contracting party shall accord national treatment and/or most-favoured-nation treatment to investments.

Common exceptions to MFN and national treatment

Many Ecuadorian BITs expressly provide that ‘most-favoured nation’ and/or ‘national treatment’ do not extend to the benefits of membership of a customs or economic union, or a common market or free trade area, and/or to taxation agreements (Germany, Argentina 38 , Bolivia, China, Chile, Costa Rica, Cuba, El Salvador, Spain, Finland, France, Italy, Nicaragua, Netherlands, Peru, United Kingdom, Sweden, Venezuela, Paraguay, Romania, United States, Canada).

The Canadian BIT specifically excludes from the MFN treatment certain bilateral or multilateral agreement and specific sectors.39 Additionally certain investments are exempted from the provisions of most-favoured-nation treatment and national treatment.40

The BIT with the United States establishes that the contracting parties reserve the right to make or maintain limited exception to national treatment in certain sectors or matters. 41 

‘In like circumstances’ / ‘in like situations’

The BITs with Canada and the United States42 specify that contracting parties shall grant investors of the other contracting party, as regards their investment, treatment no less favourable than that which, in like circumstances/situations, it grants to investors of any third state.

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Ecuador

Issue

Distinguishing features of the ‘protection and security’ standard

Scope

The formulation of the standard varies in Ecuador’s investment treaties. Some provide for ‘full protection and security’ (Germany, Canada, Finland, United States, France, Netherlands, United Kingdom) or ‘full legal protection’ (Argentina, Bolivia, Chile, Costa Rica, El Salvador, Nicaragua, Rumania, Venezuela) or ‘full and constant protection and security’ (Finland), ‘full protection’ (Sweden and Honduras). Others simply require a Contracting party to ‘protect’ the investments (China, Spain, Paraguay and Switzerland).

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Ecuador

Issue

Distinguishing features of any ‘umbrella clause’

Scope

Seven Ecuadorian investment treaties contain an umbrella clause (Germany, United States, Italy, Netherlands, Paraguay, United Kingdom and Sweden).43 

9. What are the other most important substantive rights provided to qualifying investors in this country?

Ecuador

Issue

Other substantive protections

Armed conflict/civil unrest

Ecuadorian investment treaties guarantee investors of contracting parties most favoured nation and national treatment in regard to compensation paid in the case of armed conflict or civil unrest (Germany, Argentina, Bolivia, Canada, Chile, Costa Rica, Cuba, El Salvador, Finland, France, Honduras, Italy, Nicaragua, United States, United Kingdom, Dominican Republic, Sweden, Venezuela, Netherlands, Paraguay, Peru and Romania). The treaties with China and Spain only refer to the most-favoured nation treatment whereas the Peruvian BIT refers solely to national treatment.

Free transfer of payments

Most Ecuadorian investment treaties contain a provision that requires the Contracting Party to permit investors to transfer investments and investment returns freely (Germany, Argentina, Bolivia, Canada, China, Chile, Costa Rica, El Salvador, Spain, Finland, France, Italy, Nicaragua, Netherlands, Peru, United Kingdom, Sweden, Venezuela and Switzerland).

BITs with Bolivia, Cuba, Honduras, Dominican Republic, Spain and Romania allow free transfer of payments provided that the capital is registered and payment of applicable taxes has been duly made.

Many treaties further stipulate that the transfers shall be made ‘without delay’ (Germany, Argentina, Canada, Chile, Costa Rica, El Salvador, Finland, France, Italy, Netherlands, Peru, United Kingdom, Sweden, Venezuela, Paraguay and Romania).

BITs with Germany and Spain define ‘without delay’ as ‘two months, commencing on the date on which the relevant request has been forwarded to the competent authorities’.

Some Ecuadorian BITs further provide that the rate of exchange of currency should be in accordance with the regulation of the International Monetary Fund (Germany). Others provide for the application of the exchange rate of the Contracting Party in whose territory the investment is situated (Argentina, Bolivia, Chile, China, Costa Rica, Cuba, Honduras, Nicaragua, Dominican Republic and Sweden).

Transparency

Certain BITs provide that Parties shall seek to facilitate the provision and exchange of investment information and/or shall make public its laws, regulations, administrative practices and procedures, and adjudicatory decisions that affect investments (Bolivia, Canada, Finland, Honduras, United States, Peru, Dominican Republic, Sweden, Romania).

Most favourable treatment

If the provisions of law of a contracting party or obligations under international law in addition to the BIT contain a regulation, entitling investments made by investors of the other contracting party to a treatment more favourable than the one provided by the BIT, such provisions shall, to the extent that they are more favourable to the investor, prevail over the treaty (Germany, Argentina, Bolivia, China, Chile, Costa Rica, Cuba, El Salvador, France, Finland, Honduras, Italy, Nicaragua, Netherlands, United States).

Treaty application

The BITs with Canada and the United States determine that the treaties must be applied in accordance with the measures necessary for the maintenance of public order, international peace or security and environmental concerns. 44

Performance requirements

The BITs with Dominican Republic, Costa Rica, Finland, Canada, Honduras, Paraguay and the United States determine that contracting parties may not impose obligations on investors to conduct their business in a prescribed manner.45 

Taxation measures

The general rule determines that BITs shall not apply to taxation measures: a contracting party may not be compelled to extend to investors of the other party treatment or privilege resulting from an agreement on international taxation (Germany, Argentina, Canada 46, Chile, China, Costa Rica, Cuba, Spain, United States, Finland, France, Honduras, Italy, Nicaragua, Paraguay, Peru, United Kingdom, Dominican Republic, Romania, Sweden, Venezuela).

Other BITs also determine that in the event of any inconsistency between the provisions of the investment agreement and any tax convention, the provision of the latter apply to the extent of the inconsistency (Canada, Dominican Republic, Netherlands, United States).

Finally, some other treaties distinguish claims for breach of tax conventions from claims for breach of BITs in connection with a taxation measure (United States, Canada, Netherlands and Dominican Republic).

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Ecuador

Issue

Procedural rights

State-to-State arbitration

All Ecuadorian BITs contain arbitration clauses for the settlement of disputes arising from their application between the contracting parties. Such arbitration clauses determine that any dispute shall be settled by negotiations between the governments of the two contracting parties. If the parties are unable to reach a settlement within six months 47, following the date on which such negotiations were requested, they can submit the dispute to an arbitral tribunal (Germany, Argentina, Bolivia, Canada, China, Chile, Costa Rica, Cuba, El Salvador, Spain, Finland, Honduras, Italy, Nicaragua).

Fork-in-the-road

Some BITs include the ‘Fork in the Road’ clause which provides that the investor must choose between the litigation of its claims in the hosts State’s domestic courts or through international arbitration and that the choice, once it has been made, is final (Argentina, Bolivia, Chile, China Costa Rica, Cuba, El Salvador, Nicaragua, Peru, Venezuela and Romania).48

The German BIT provides that when the foreign investor has submitted the dispute to the courts of the other Contracting State, he is entitled to refer the dispute to an arbitral tribunal in the following cases: (i) if the court has not decided on the merits in 18 months, and (ii) if the court’s decision violates the provisions contained in the BIT.49

The BIT with China determines a specific procedure to solve conflict related to the amount of compensation in expropriation cases (See article 9(3)).

The BIT with Finland establishes that an investor who has previously submitted the dispute to national jurisdiction may only go to an arbitral tribunal if he renounces to pursue the case in the national courts.50

Cooling-off period

The cooling-off period provided by Ecuadorian BITs is six months.51

Local courts, ICSID or ad hoc arbitration

Some BITs grant the investor the possibility to submit the dispute to local courts (Germany, Argentina, Bolivia, Chile, China, Costa Rica, Cuba, El Salvador, Finland, Honduras, Italy, Nicaragua, Paraguay, Peru, Romania, Venezuela, United States and Netherlands).

Where the other contracting party is a signatory to the ICSID Convention, Ecuadorian BITs routinely provide for ICSID arbitration (Germany, Argentina, Bolivia, Canada, Dominican Republic, Chile, Costa Rica, El Salvador, Spain, France, Finland, Honduras, Italy, Nicaragua, Paraguay, Peru, Romania, United Kingdom, Sweden, United States, Venezuela and Netherlands). If the other contracting party is not a signatory to the ICSID Convention, some treaties provide for international arbitration according to the ICSID Additional Facility Rules (Romania, Costa Rica, Argentina, United States, Canada and Venezuela).

Many treaties provide for international ad hoc arbitration (Paraguay, United States, Germany, Netherlands, Finland and China).

Some treaties also allow investors to pursue an arbitration claim through ad hoc tribunals constituted in accordance with UNCITRAL Rules (Argentina, Bolivia, Canada, Costa Rica, Cuba, Spain, Finland, Honduras, Romania, Sweden, United States, Venezuela, Paraguay, Italy and Netherlands).

Applicable law

The tribunal shall decide pursuant to the BIT, the law of the contracting party, including rules on conflict of laws, the terms of any specific agreement concluded in relation to investment and the principles of international law on the subject (Argentina, Bolivia, Chile, Costa Rica, El Salvador, Spain 52, China, Cuba, Honduras and Nicaragua).

11. What is the status of this country’s investment treaties?

Ecuador

a. Duration and termination

Initial term

All Ecuadorian BITs allow Contracting Parties to unilaterally terminate the treaty at any time after the end of its initial term. Such initial term may vary depending on the treaties: five years (China, Dominican Republic and Switzerland); 10 years (Germany, Argentina, Bolivia, Chile, Costa Rica, Cuba, El Salvador, Spain, United States, Finland, France, Honduras, Italy, Nicaragua, Netherlands, Paraguay, United Kingdom, Romania, Sweden and Venezuela); 15 years (Peru). The Canadian treaty does not specify any initial term.

Renewal term

Many BITs remain in force until termination by one of the Contracting Parties and do not specify any renewal term (Germany, Argentina, Canada, Chile, China, Costa Rica, Cuba, El Salvador, United States, France, Nicaragua, Peru, United Kingdom, Sweden and Venezuela). Other treaties provide that contracting parties may extend tacitly for periods of: 10 years (Finland, Honduras, Netherlands, Paraguay, Romania and Bolivia); five years (Spain, Italy, and Dominican Republic); and two years (Switzerland).

Period of time in which the BIT continues in force

The BIT shall continue in force until the expiration of a period of time from the date on which either contracting party gave written notice of termination to the other: 12 months (Germany, Argentina, Bolivia, Canada, Chile, China, Cuba, El Salvador, United States, Finland, France, Honduras, Nicaragua, United Kingdom, Romania, Sweden and Venezuela); nine months (Costa Rica); six months (Spain, Italy, Netherlands, Paraguay, Peru, Dominican Republic and Switzerland).

Survival clause

BITs typically include a survival clause which guarantees that the provision of the treaty will remain in effect, as to investments made prior to termination, for another period of time after its termination: 15 years (Germany, Argentina, Canada, France, Netherlands, United Kingdom and Sweden); 10 years (Bolivia, Chile, China, Costa Rica, Cuba, El Salvador, Spain, United States, Finland, Honduras, Nicaragua, Paraguay, Peru, Romania, Switzerland and Venezuela); five years (Italy and Dominican Republic).

b. Status of BITs

There is a strong political decision to withdraw from all BITs. 54 

• In 2008, Ecuador withdrew from the BITs with Cuba, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay, Dominican Republic, Uruguay 53 , and Romania. 54  In 2010 Ecuador terminated the BIT with Finland 55 . Given their survival provisions, certain termination of BITs may not be immediately effective as to investments made prior to such termination.

• Termination process is still pending for the BITs with Germany, Argentina, Bolivia, Canada, Spain, United States, France, Italy, Peru, United Kingdom, Sweden, Switzerland, Venezuela, Chile, China and Netherlands. Until this withdrawal process is not completed, and until Ecuador officially notifies the unilateral termination of the BIT to the corresponding contracting party, these treaties remain in force.

• The BITs with Costa Rica and Russia were never entered into force.

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Ecuador

Government entity to which claim notices are sent

The notice of a dispute against Ecuador under investment treaty arbitration should be sent to the Attorney General’s office. Currently, the Ecuadorian Attorney General is Mr Diego García Carrión. 57 

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Ecuador

Government department which manages investment treaty arbitrations

In Ecuador, the Attorney General’s Office is divided into departments with different responsibilities. The Department of International Arbitration and Foreign Affairs is responsible for managing and supervising any international arbitration that involves Ecuador as plaintiff, defendant or interested third party. The head of the Department of International Arbitration and Foreign Affairs is Ms. Blanca Gómez de la Torre.

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Ecuador

Internal/external counsel

Generally, for investment treaty arbitration, Ecuador hires external counsel. The State does not go through a formal public procurement process to hire external counsel. 58 As an internal policy, the Attorney General Office hires external counsel to represent the state in ISDS cases.

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Ecuador

Washington Convention Denunciation

The government of the Republic of Ecuador signed the ICSID Convention on 15 January 1986 and deposited its instrument of ratification on the same date. The Convention entered into force for Ecuador on 14 February 1986.

On 2 July 2009, the President of the Republic issued Executive Decree No. 1823 by which he resolved to denounce and, therefore, to declare the termination of the ICSID Convention.

On 6 July 2009, the depositary of the Convention received a written notice of Ecuador’s denunciation of the Convention. In accordance with article 71 of the Convention, the denunciation took effect six months after the receipt of Ecuador’s notice, ie,  on 7 January 2010. 59 

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Ecuador

New York Convention implementing legislation

Ecuador signed the New York Convention on 17 December 1958 and ratified it on 3 January 1962. The Convention entered into force for Ecuador on 3 April 1962. 60

Ecuador ratified the New York Convention resorting to the commercial and reciprocity reservations set out in article I(3). According to this reservation Ecuador would apply the Convention on a reciprocity basis, only to ‘recognise and enforce foreign arbitral awards that arise from legal relationships that are considered commercial under Ecuadorian Law’. 61 

New York Convention implementing legislation

Ecuador has not enacted specific legislation implementing the Convention. Yet, the Arbitration and Mediation Law (AML) contains the applicable provisions for the recognition and enforcement of international awards. Specifically, article 42 reads ‘[a]wards issued in an international arbitration proceeding shall have the same effects and shall be enforced in the same manner as awards issued in a domestic arbitration proceeding’.

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Ecuador

Legislation governing non-ICSID arbitrations

Yes, the AML has a specific set of rules that apply to international arbitration proceedings. 62

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Ecuador

Compliance with adverse awards

The AML provides that foreign awards should be executed with the same procedures as that for domestic awards. This procedure is established in the Code of Civil Procedure, which provides a forced execution procedure called ‘via de apremio’. 63 

Currently all awards have been ultimately satisfied.

19. Describe the national government’s attitude towards investment treaty arbitration

Ecuador

Attitude of government towards investment treaty arbitration

The Ecuadorean government is very critical of investment treaty arbitration.64 The government denounced the ICSID Convention and, after a clear green light from the Constitutional Court, it is now in the process of denouncing its BITs.

In 2013 the government created the Citizen’s Commission for the Integral Audit of Bilateral Investment Treaties and the International Arbitration System (CAITISA in Spanish).65 CAITISA’s main objectives are to examine and evaluate: (i) the execution and negotiation process of BITs and other investment agreements signed by Ecuador, as well as the consequences of their application; (ii) the content and compatibility of these treaties with Ecuadorian legislation; (iii) the validity of the proceedings adopted and awards and decisions issued by international investment tribunals and arbitral bodies where Ecuador has been a party.66 CAITISA has been a vocal critic of investment arbitration. In 2015 CAITISA issued its reports summarising the analysis, conclusions and recommendations made to the Ecuadorian government. The specific content of the report is not public yet.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Ecuador

Attitude of local courts towards investment treaty arbitration

No cases seeking enforcement of an international award arising from investment treaty arbitration has been filed before Ecuadorean courts.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Ecuador

in 2010 the Ecuadorian Congress enacted the Organic Code of Production, Trade and Investment, a law meant to create incentives and attract foreign investment. The safeguards created by the law, curiously, resemble the ones contained in BITs. For example, the investors are guaranteed non-discrimination and full protection and security; the caveat is that both guarantees are measured only against a national standard. No case pretending to enforce these rights has been filed before Ecuadorian courts.

The recently enacted Law on Production Incentives and Tax Fraud Prevention provides the possibility to grant a ten-year exemption of income tax to companies operating in basic industries (this concept is left undefined) and the possibility to include tax stabilisation clauses in investment contracts.

National legislation

Substantive protections

Procedural rights

FET

Expropriation

Other

Local courts

Arbitration

Organic Code of Production, Trade and Investment

 

Art. 18: declaration of public interest, pursuant to an internal legal process, without discrimination, in exchange for fair compensation.

Art. 17 non-discriminatory conduct

Art. 18 propriety rights

Art. 19 freedom to produce and trade, general freedom to price product or services, access to administrative proceedings to prevent competitors from violating antitrust laws, general freedom to import and export goods and services, freedom to transfer gains to foreign accounts, freedom to buy or sell stock, among others.

Art. 27:

Mandatory exhaustion of administrative procedures.

Negotiations for a period of 60 days.

Compulsory mediation within the three months following negotiations.

If after six months after exhaustion of administrative procedures the parties have not reached an agreement, and they have not submitted the case to arbitration, the dispute will be submitted to the national courts.

Art. 27: foreign investors may choose to submit their dispute to national or international arbitration tribunal. The tribunal’s decision shall be of law.

The international arbitration must be conducted according to the provisions included in international treaties.

The applicable law is the Ecuadorean law.

The awards will be final and binding for the parties.

Tax issues shall not be subject to arbitration.

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Ecuador

No. As a capital importing nation, Ecuador has not created any scheme to protect local investors when investing abroad.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Ecuador

Awards

Case

Instrument(s) invoked

Decisions

IBM World Trade Corporation v Republic of Ecuador, ICSID Case No. ARB/02/10

BIT Ecuador–United States

Award embodying the Parties’ Settlement, 22 July 2004 (not public)

Repsol YPF Ecuador SA v Empresa Estatal Petroleos del Ecuador (Petroecuador), ICSID Case No. ARB/01/10

BIT Ecuador–Spain

Award, 20 February 2004

Decision on Annulment, 8 January 2007

M.C.I. Power Group LC and New Turbine, Inc v Republic of Ecuador, ICSID Case No. ARB/03/6

BIT Ecuador–United States

Award, 31 July 2007

Decision on Annulment, 19 October 2009

Duke Energy Electroquil Partners & Electroquil SA v Republic of Ecuador, ICSID Case No. ARB/04/19

BIT Ecuador–United States

Award, 18 August 2008

Empresa Eléctrica del Ecuador Inc v Republic of Ecuador, ICSID Case No. ARB/05/9

BIT Ecuador–United States

Award, 2 June 2009

Noble Energy Inc and Machalapower Cia Ltda v The Republic of Ecuador and Consejo Nacional de Electricidad, ICSID Case No. ARB/05/12

BIT Ecuador-United States

Decision on jurisdiction, 5 March 2008

Last decision: Order of the Tribunal taking note of the discontinuance of the proceedings, 20 May 2009

Técnicas Reunidas, SA and Eurocontrol, SA v Republic of Ecuador, ICSID Case No. ARB/06/17

BIT Ecuador-Spain

Order issued by the Acting Secretary-General taking note of the discontinuance of the proceedings, 13 May 2008

City Oriente Limited v Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No. ARB/06/21

Hydrocarbons production share contract containing an ICSID arbitration clause

Order of the Arbitral Tribunal taking note of the discontinuance of the proceedings, 12 September 2008

Murphy Exploration and Production Company International v Republic of Ecuador, ICSID Case No. ARB/08/4

BIT Ecuador–United States

Award on jurisdiction, 15 December 2010

Repsol YPF Ecuador SA and others v Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (PetroEcuador), ICSID Case No. ARB/08/10

BIT Ecuador-Spain

Order of the Arbitral Tribunal taking note of the discontinuance of the proceedings, 9 February 2011

Corporación Quiport SA and others v Republic of Ecuador, ICSID Case No. ARB/09/23

Various BITs

Order of the Secretary-General taking note of the discontinuance of the proceedings, 11 November 2011

Ulysseas, Inc v The Republic of Ecuador, UNCITRAL (PCA)

BIT Ecuador-United States

Award, 12 June 2012

Occidental Exploration and Production Company v The Republic of Ecuador, LCIA Case No. UN3467

BIT Ecuador-United States

Award, 1 July 2004

EnCana Corporation v Republic of Ecuador, LCIA Case No. UN3481, UNCITRAL (formerly EnCana Corporation v Government of the Republic of Ecuador

BIT Ecuador–Canada

Award, 3 February 2006

Chevron Corporation and Texaco Petroleum Company v The Republic of Ecuador, UNCITRAL (P CA Case No. 34877 2007-2)

BIT Ecuador-United States

Award, 31 August 2011

Únete Telecomunicaciones SA and Clay Pacific SRL. v the Republic of Ecuador, UNCITRAL

BIT Ecuador-Bolivia

Not public

Republic of Ecuador v United States of America (PCA Case No. 2012-5)

BIT Ecuador-United State

Award, 29 September 2012

Occidental Petroleum Corporation and Occidental Exploration and Production Company v The Republic of Ecuador, ICSID Case No. ARB/06/11

BIT Ecuador-United States

Award, 5 October 2012

Decision on Annulment, 2 November 2015

Pending proceedings

Chevron Corporation and Texaco Petroleum Corporation v Republic of Ecuador (UNCITRAL) (PCA Case No. 2009-23)

BIT Ecuador–United States

First Partial Award, 17 September 2013

Merck Sharpe & Dohme (IA) Corporation v The Republic of Ecuador, UNCITRAL, PCA

BIT Ecuador–United States

Not public

Copper Mesa v Republic of Ecuador, PCA Case No. 2012-02

BIT Ecuador–Canada

Not public

Murphy Exploration & Production Company – International v The Republic of Ecuador, UNCITRAL, PCA Case No. AA434

BIT Ecuador–United States

Not public

Perenco Ecuador Ltd v The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No. ARB/08/6

BIT Ecuador–France

Decision on liability, 12 September 2014

Pending: decision on damages

Burlington Resources Inc v Republic of Ecuador, ICSID Case No. ARB/08/5 (formerly Burlington Resources Inc and others v The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (PetroEcuador))

BIT Ecuador–United States

Decision on liability, 14 December 2012

Pending: the Tribunal will move to the damages phase

Last decision issued: Procedural Order No. 25 concerning production of documents, 23 December 2014

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Ecuador

Article/Book

‘Ecuador to Denounce Remaining BITs’, Global Arbitration Review (30 October 2009), available at www.globalarbitrationreview.com/news/article/19251

Jonathan C. Hamilton, Omar E. Garcia-Bolivar, and Hernando Otero, Latin American Investment Protections: Comparative Perspectives on Laws, Treaties, and Disputes for Investors, States and Counsel, Martinus Nijhoff Publishers, 2012.

Juan Manuel Marchán Maldonado, ‘El tratamiento del arbitraje en la nueva Constitución ecuatoriana’, Revista del Club Español de Arbitraje. Wolters Kluwer España, 2008.

Marco Tulio Montañés y Xavier Andrade Cadena, ‘Introductory Note to Ecuador’s Notice under ICSID article 25(4)’, International Legal Materials, 47, American Society of International Law, Washington DC, 2008.

Omar García-Bolívar et al., Recognition and Enforcement of International Commercial Arbitral Awards in Latin America: Law Practice and Leading Cases, Brill Nijhoff, 2014.

Rodrigo Jijón y Juan Manuel Marchán Maldonado, ‘National and International Arbitration in Ecuador’, The Arbitration Review of the Americas 2014 , Global Arbitration Review.

Thomas E Carbonneau, Mary H Moura, Latin American Investment Treaty Arbitration: The Controversies and Conflicts, Wolters Kluwer International Law, November 2008.

Notes

1 This report takes into account all BITs signed by Ecuador although some of them have been denounced.

2 While not all BITs provide for ISDS, all treaties provide for state-to-state arbitration.

3 Article XIII (3)(b) ‘An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if: […] (b) the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the contracting party concerned or in a dispute settlement procedure of any kind’.

4 The Preamble refers to ‘fair and equitable treatment’.

5 The MFN treatment applies only in cases of compensation for losses and application of other rules. See BIT with Dominican Republic article 4(2) and BIT with Honduras article VI.

6 The Preamble refers to ‘fair and equitable conditions’.

7 The BIT with Switzerland does not provide arbitration between contracting parties and investors of the other contracting party, it only offers state-to-state arbitration.

8 By diplomatic notes dated 18 May 1999, the contracting parties agreed to extend this BIT to the Bailiwicks of Jersey and Guernsey and the Isle of Man.

9 The BIT with Canada only applies this precondition to investors from Ecuador and not to those from Canada, article I(h)(ii).

10 The BIT with Switzerland only applies this precondition to investors from Ecuador and not to those from Switzerland, article 6(b)(ii).

11 According to the BIT with United Kingdom, companies are legal persons constituted in accordance with the law in force of the contracting party or domiciled in the territory of such party, article I(d)(2). This provision only applies to investors from Ecuador and not to those from United Kingdom. This BIT is different from the Canadian and the Swiss BITs as is does not impose both conditions (ie, incorporation and domicile) for investors to benefit from the treaty.

12 These provisions only apply to investors from Germany and Switzerland and not to those from Ecuador.

13 In Perenco v Ecuador, the Tribunal held that, absent any qualifier such as ‘directly’, the ordinary meaning of the term ‘controlled’ encompasses direct and indirect control. See Decision on jurisdiction and liability of 12 September 2014, ICSID Case ARB/08/6, paras. 509–510.

14 See BIT with the United States, article 1(2): ‘Each Party reserves the right to deny to any company the advantages of this Treaty if nationals of any third country control such company and, in the case of a company of the other Party, that company has no substantial business activities in the territory of the other Party or is controlled by nationals of a third country with which the denying Party does not maintain normal economic relations’.

15 This provision only applies to the definition of investor in the case of Canada. The definition of investor in the case of Ecuador is different, as it only requires natural persons to be nationals of Ecuador pursuant to its legislation.

16 The BIT with Cuba only applies this provision to investors from Cuba and not to those from Ecuador, article I(2).

17 See Protocol dated 21 March 1996, section 1(b).

18 See BIT with Canada, article 1(h).

19 The BIT with the United States provides the requirement that a ‘claim to money’ be associated with an investment. Such requirement allow to exclude claims arising solely from trade transactions, such as a simple movement of goods across a border, from being considered investments covered by the Treaty.

20 As regards intellectual property rights, the Canadian BIT determines that a contracting party may derogate from the most-favoured-nation treatment and the national treatment in a manner that is consistent with the agreement establishing the World Trade Organization done at Marrakesh, April 1994 (article VI (a)).

21 See BIT with Italy, Protocol dated 23 May 2013, section 1.

22 See BIT with Canada, article I(d) and (e) and article 11.

23 See BIT with France, article 8.

24 See BIT with Germany, Protocol dated 21 March 1996, Section (2)(b).

25 The BIT with Costa Rica specifically includes the airspace. See article 1(4)(b).

26 See BIT with France, article 2.

27 See BIT with Finland, article 1(4).

28 See BIT with Germany, Protocol dated 21 March 1996, Section (2)(a).

29 See BIT with Canada, article VI(3).

30 As regards Canada:
• social services (ie public law enforcement; correctional services; income security or insurance; social security or insurance; social welfare; public education; public training; health and child care);

• services in any other sector;

• government securities – as described in Standard Industrial Classification 8152;

• residency requirements for ownership of oceanfront land;

• measures implementing the Northwest Territories and the Yukon Oil and Gas Accords.

As regards Ecuador: ‘ownership of real estate (direct or indirect) within 50 kilometres of the borders of Ecuador, and within territories designated as reserved areas such as national parks, as established by the competent authorities of the Government of the Republic of Ecuador’. See Annex of BIT with Canada.

31 In Occidental Exploration and Production Company v Republic of Ecuador, the Tribunal stated that: ‘Although fair and equitable treatment is not defined in the Treaty, the Preamble clearly records the agreement of the parties that such treatment ‘is desirable in order to maintain a stable framework for investment and maximum effective utilisation of economic resources’. The stability of the legal and business framework is thus an essential element of fair and equitable treatment’. See LCIA Case No. UN3467, Final Award, 1 July 2004, para.183.

32 The BIT with Peru is more specific and includes reasons of national security, public necessity or social order. See article 4.

33 See BIT with the United States, article III (2).

34 The BIT with Italy determines that compensation shall be considered timely if made without undue delay and in any case within two months. See article 5(4).

35 The BIT with the United States refers to ‘commercially reasonable rate’. See article III(1).

36 See BIT with Italy, article 5(7).

37 The BIT with the United States determines that the investor has the right ‘to prompt review by the appropriate judicial or administrative authority of the other party to determine whether … such expropriation, and any associated compensation, conforms to the principles of international law’. See article III(2) .

38 The BIT with Argentina includes a specific exception relating to benefits and privileges resulting from agreements providing for concessional financing concluded by Argentina with Italy on 10 December 1987 and with Spain on 3 June 1988. See article III(5).

39 See article III(3): ‘bilateral or multilateral agreement establishing a free trade area or customs union; negotiated within the framework of the GATT; or relating to aviation, telecommunications transport networks and telecommunications transport services; fisheries; maritime matters, including salvages or financial services’.

40 Article VI (2): ‘(a) procurement by a government or state enterprise;

(b) subsidies or grants provided by a government or a state enterprise, including government-supported loans, guarantees and insurance;

(c) any measure denying investors of the other contracting party and their investments any rights or preferences provided to the aboriginal peoples of Canada; or

(d) any current or future foreign aid programme to promote economic development, whether under a bilateral agreement, or pursuant to a multilateral arrangement or agreement, such as the OECD Agreement on Export Credits’.

41 See BIT with United States, Protocol, sections 2 to 4.

42 In Occidental Exploration and Production Company v Republic of Ecuador, claimant argued that the absence of ‘in like situations’ in the MFN clause in the BITs with Spain and Argentina resulted in a less restrictive standard of national treatment than that found in the BIT with the United States, which refers to ‘in like situations’. The Tribunal did not address this issue, having found a national treatment breach in any event under BIT with the United States. See LCIA Case No. UN3467, Final Award, July 1, 2004, paras. 170, 173 and 178.

43 In Burlington Resources v The Republic of Ecuador, the Tribunal found that an umbrella clause claim is a treaty claim, not a contract claim. See Decision on Jurisdiction dated 2 June 2010, para. 189.

44 See BIT with Canada, article XVII and BIT with the United States, article IX.

45 See BIT with the United States Art. II(6); BIT with Canada, article V(2) and BIT with Dominican Republic, article 2(4).

46 In the case brought by EnCana Corporation against the Republic of Ecuador the award rendered by the Tribunal on 3 February 2006 rejected the claim alleging that this related to tax measures under article VII of the BIT.

47 The BIT with United Kingdom is the only one that does not specify the period of six months.

48 In Occidental Exploration and Production Company v Republic of Ecuador, the Tribunal stated that the ‘fork in the road’ mechanism assumes that the investor has made a choice between alternative avenues; this requires that the choice be made entirely free and not under any form of duress. See LCIA Case No. UN3467, Final Award, 1 July, 2004, paras. 60-61.

49 See the BIT with Germany, article 10(3).

50 See the BIT with Finland, article 10(3).

51 In Murphy Exploration and Production Company International v Republic of Ecuador, the claimant had initially complained about the windfall levy in a claim at ICSID in 2008. However, that claim was rejected on jurisdictional grounds in 2007, when the Tribunal ruled that the company had not complied with a six-month negotiation period mandated by the US-Ecuador BIT. See Decision 15 December 2010, ICSID Case No. ARB/08/4.

52 The BITs with China and Spain only refers to provisions contained in the treaty, the international law and the domestic law.

53 See Official Register No. 452 dated 23 October 2008.

54 See Official Register No. 258 dated 17 August 2010, available at
http://italaw.com/sites/default/files/treaty-interpretations/ita0943.pdf

55 See note No. 749 sent to the Embassy of Romania in Peru on 14 July 2008.

56 According to the Political Constitution of the Republic of Ecuador and the Ecuadorian Laws the BIT withdrawal depends on the following public institutions:

• the President of the Republic who requests the withdrawal and is in charge of notifying the Contracting States regarding the decision;

• the Constitutional Court that determines the constitutionality and relevance of the President’s request; and

• the National Assembly which approves the treaty’s termination.

57 See Organic Law of the State Attorney General, article 3(d).

58 See Organic Law of the State Attorney General, article 8.

59 See List of Contracting States and other Signatories of the Convention (as of 11 April 2014), ICSID, available at https://icsid.worldbank.org/apps/ICSIDWEB/icsiddocs/Documents/List%20of%20Contracting%20States%20and%20Other%20Signatories%20of%20the%20Convention%20-%20Apr%202014.pdf

60 See New York Convention Countries, available at: www.newyorkconvention.org/contracting-states/list-of-contracting-states.

61 See Official Register 293 of 19 August 1961.

62 Official Register No. 145 dated 4 September 1997; Codification published in Official Register No. 417 dated 14 December 2006.

63 See Ecuador’s Code of Civil Procedure article 43 et seq.

64 The President of Ecuador Rafael Correa Delgado had publicly declared the government’s position vis-à-vis international arbitration and BITs. See El Ciudadano governmental online newspaper, UNASUR will have its arbitration center in 2015, October 3, 2014, available www.elciudadano.gob.ec/en/unasur-will-have-its-arbitration-center-in-2015/; Hay vínculos entre las transnacionales y los jueces de centros de arbitraje internacional, October 19, 2014, available at: www.elciudadano.gob.ec/hay-vinculos-entre-las-transnacionales-y-los-jueces-de-centros-de-arbitraje-internacional/; Centros de arbitraje internacional reflejan un mundo injusto a favor del capital, October 17, 2014, available at: www.elciudadano.gob.ec/centros-de-arbitraje-internacional-reflejan-un-mundo-injusto-a-favor-del-capital/; El orden mundial no es solo injusto, es inmoral. Todo está orientado a servir a los más poderosos (VIDEO), 24 October 2014, available at: www.elciudadano.gob.ec/el-orden-mundial-no-es-solo-injusto-es-inmoral-todo-esta-orientado-a-servir-a-los-mas-poderosos/

65 See Decree No. 1506 of 6 May 2013 (creating the Commission for the Citizen’s Audit of Reciprocal Investment Protection Treaties and the International Investment Arbitration), available at: http://decretos.cege.gob.ec/decretos/.

66 See Decree No. 1506 of 6 May 2013, article 2.

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