In its second interim award, dated 16 February 2012, the tribunal ordered Ecuador, "whether by its judicial, legislative or executive branches", to take all necessary measures to suspend the enforcement of the Provincial Court judgment granted against Chevron in the Lago Agrio litigation (Maria Aguinda et al. v. Chevron Texaco Corporation, Proceeding No. 002-2003 (at first instance), Proceeding No. 2011-0106 (on appeal), Provincial Court of Sucumbíos, Sole Division). Chevron has been ordered to provide security of US$50 million for any losses that Ecuador may suffer in complying with the award. The second interim award also precludes Ecuador from certifying the court judgment, which would be a prerequisite to enforcement. This award follows on from an earlier interim award, issued in February 2011, in which the tribunal ordered Ecuador to take all measures at its disposal to suspend enforcement of the judgment.

In its third interim award, dated 27 February 2012, the tribunal rejected a number of jurisdictional challenges. Ecuador's principal argument was that there was no "investment", nor any dispute arising out of, or relating to, an "investment agreement", for the purposes of establishing jurisdiction under the bilateral investment treaty (BIT). In particular, it argued that any investment by TexPet had ended with the expiry of the concession agreements and that Chevron had never itself invested in Ecuador. The tribunal rejected this argument. As far as TexPet was concerned, the concession agreement and the settlement agreements had to be viewed as a single transaction, so that the settlement agreement formed part of TexPet's overall investment. It was irrelevant that the settlement agreement post-dated the expiry of the concession agreements.

As far as Chevron was concerned, Chevron had never itself invested in the concession agreements and was not party to the settlement agreement. However, the BIT extended to indirect investments and, as indirect owner of TexPet, Chevron was entitled to claim. Furthermore, it was sufficiently arguable that Chevron was a "releasee" entitled to assert contractual rights under the settlement agreement as a matter of Ecuadorian law. The tribunal declined to reach any view on whether Chevron could claim as a direct investor, leaving this over to the merits phase.

The tribunal went on to hold that the claimants' claims were sufficiently arguable on the merits to justify the tribunal assuming jurisdiction. Furthermore, it rejected a submission (based on the international law principle deriving from Case of the Monetary Gold removed from Rome in 1943 (Italy v. France, United Kingdom of Great Britain and Northern Ireland and United States of America), Preliminary Question, Judgment, 15 June 1954, I.C.J. Rep. 1954) that it should not exercise jurisdiction as the subject matter of the decision would determine the rights and obligations of third parties, namely the Lago Agrio claimants. The tribunal had no jurisdiction over those parties and the claims could properly proceed without their presence in the arbitration. Furthermore, the effect of its decision on them would depend on the form and content of any order made, which was an issue for the merits phase. Finally, the tribunal decided that the fork in the road provision of the BIT did not apply on its true construction.

The second interim award raises the question of the extent to which the UNCITRAL tribunal is seeking to interfere with the judicial process of a sovereign state and has prompted correspondence to the UN Secretary General, Ban Ki-moon, raising concerns over this issue and calling on UNCITRAL to ensure that proceedings under its rules are not used improperly in contravention of international law. It remains to be seen whether Ecuador will be prepared to comply with the tribunal's order.

The third interim award is of interest insofar as it treats the settlement agreement as an "investment" for the purposes of establishing jurisdiction. Note, however, that in the tribunal's view, the settlement agreement alone would not suffice to found jurisdiction. It was only when viewed along with the concession agreement that it could be seen as forming part of an investment agreement for these purposes. Further, issues relating to admissibility (including whether the pending appeal against the Lago Agrio judgment meant that the claimants could not show any loss) have been left over.

In the light of the third interim award, the arbitration will now proceed to the merits phase.

Chevron Corporation and another v Republic of Ecuador (PCA Case No 2009-23) (Second Interim Award on Interim Measures) (16 February 2012) and Chevron Corporation and another v Republic of Ecuador (PCA Case 2009-23) (Third Interim Award on Jurisdiction and Admissability) (27 February 2012).