In 1973, Chevron and Ecuador signed an agreement allowing Chevron to develop Ecuadorian oil fields in exchange for providing below-market oil to the Ecuadorian government. The deal was set to expire in 1992, and the parties were unable to agree to an extension. Chevron filed several breach of contract suits against Ecuador. In 1995, Chevron and Ecuador signed a settlement agreement conclusively terminating all rights and obligations between the parties. The agreement provided for the continuation of the pending lawsuits.

In 2006, Chevron commenced an international arbitration action before a three-member tribunal based out of The Hague, claiming that Ecuador had violated the contract terms by failing to resolve its lawsuits in a timely fashion. Ecuador objected to the tribunal’s jurisdiction, arguing that it had never agreed to arbitrate with Chevron as well as asserting its sovereign immunity. Who has jurisdiction here? Discuss the sovereign immunity claim. What lessons should companies take away from these types of foreign contracts? [Chevron v Republic of Ecuador, 795 F.3d 200 (D.C.C. 2015)]