Australian engineering and services giant Worley is considering the options for further legal proceedings after losing international arbitration against Ecuador relating to historic contracts with state oil company Petroecuador, for which it was claiming almost US$200 million.
Worley in 2019 had launched legal action, accusing Ecuador of defaulting on payments connected to contracts relating to projects with the state-owned Petroecuador, including inspection and management contracts related to the refurbishment of the Esmeraldas oil refinery — and reportedly also multiple gas projects — which were sponsored by the host government.
“Through these services, Worley provided significant value to our customers. [However], the parties were unable to agree payment for the unpaid Worley receivables and Worley commenced the arbitration in 2019 seeking payment,” the contractor said in a statement on Wednesday.
The contractor added it had been actively prosecuting the arbitration since it commenced. However, on 22 December, the international arbitration tribunal issued its decision dismissing the arbitration on jurisdictional grounds.
“Worley is reviewing the decision with its legal advisors and considering the options for further legal proceedings,” the company said.
Ecuador’s procurator on Friday confirmed the nation had triumphed in international arbitration and therefore would not be liable to pay US$198 million to Worley International Services over oil project contracts with state-owned Petroecuador.
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The arbitration was commenced under the Bi-Lateral Investment Treaty between the US and Ecuador. Worley noted the receivables related to contracts for services provided by WorleyParsons (now Worley) from 2011 until 2017.
The three international arbiters last week found in favour of Ecuador, the procurator said in a statement, reported Reuters.
“The tribunal accepted the arguments made by the republic of Ecuador and rejected the aspirations of WorleyParsons,” the statement said, using a previous name for the Australia-headquartered company.
Worley will be obliged to pay Ecuador’s fees and costs for the arbitration process, the statement added.