Ex. 116

DC:725169.8
IN THE ARBITRATION PROCEEDINGS
UNDER UNCITRAL ARBITRATION RULES NO. CPA 2009-23
BETWEEN
_____________________________________
CHEVRON CORPORATION AND TEXACO
PETROLEUM COMPANY,
Claimants,
-and-
THE REPUBLIC OF ECUADOR,
Respondent.
_______________________________________
FOREIGN LAW DECLARATION OF FABIÁN ANDRADE NARVÁEZ
I, Fabián Andrade Narváez, hereby declare that this statement is true and correct.
1. Scope of this Declaration
1. I have been asked by the Republic’s legal counsel to issue a legal opinion
addressing several of Claimants’ allegations of judicial error and due process
violations in the Lago Agrio litigation.
2. Academic and Professional Credentials
2. My name is Fabián Andrade Narváez. I obtained a Juris Doctor degree in
juridical sciences and law from the Pontificia Universidad Católica del Ecuador. I

2
pursued postgraduate studies at the Universidad Complutense de Madrid,
Universidad Francisco de Vitoria, Universidad de Salamanca and Universidad
Andina Simón Bolívar.
3. From 2007 to 2009, I served as advisor for the Supreme Court Chamber for
Contentious Administrative Proceedings, where I participated in at least 800 cases
that were adjudicated during that period. From 2009 to 2011, I served as the Attorney
General for the City of Quito. In this position I represented the city in about 4500
cases before the Ecuadorian Courts.
4. From 1998 to 2000, I taught General Theory of Legal Proceedings at the
Pontificia Universidad Católica del Ecuador. Since 2006, I teach Research
Methodology and Legal Reasoning and Argumentation at the San Francisco de Quito
University.
5. In the interest of full disclosure, I am currently serving as an expert for the
Republic in the arbitration proceedings brought against it by the companies
Burlington (ICSID Case No. ARB/08/5) and Perenco (ICSID Case No. ARB/08/6).
6. My curriculum vitae, which details my professional and academic experience,
is enclosed as Annex A to this report.
3. Summary of Conclusions
7. This section provides an overview of my conclusions regarding each of the
matters addressed below in this report..
a. Timing for adjudication of preliminary defenses
The general rule in Ecuadorian procedure is that all defenses must be raised in the
answer to the complaint and only addressed as part of the final judgment – not before. This
rule applies to a defense based on res judicata, which must also be deferred until the
judgment.
The same general rule applies also to any defense addressed to the jurisdiction or to
the competence of the court. The existence of a court’s jurisdiction and competence to
adjudicate are essential elements of any judicial process, and every judge has the duty and
authority to affirmatively declare that he lacks jurisdiction or competence to adjudicate a
particular matter whenever that is the case. However, where a defendant challenges the
court’s jurisdiction or competence by way of a defense, the judge will address the
allegation only if he considers that his lack of competence is immediately apparent;
otherwise, the general rule described above applies and the defense must be decided at the
time of the judgment.
b. Allegedly Improper Joinder of Claims
Ecuadorian civil procedure allows the joinder of multiple claims by a plaintiff
unless (a) such claims are either (i) contradictory or mutually incompatible or (ii) of a type
customarily heard in different proceedings (e.g., ordinary proceedings vs. oral summary

3
proceedings) and (b) the plaintiff has not requested that they be heard together in an
ordinary proceeding.
The general rule in Ecuador is that a particular claim must be heard through an
ordinary proceeding, unless it is of the sort designated to be heard in a special proceeding.
Since 1999 the Environmental Management Act (“EMA”) has provided that any action
predicated on environmental harm must be heard through a special proceeding -- an oral
summary proceeding. Since that date, all claims for environmental harm, whether seeking
to redress actual harm or prevent contingent harm from materializing, must be adjudicated
in oral summary proceedings. Claimants therefore err when they contend that the tort
actions filed by the Lago Agrio Plaintiffs under various provisions of the Civil Code (all of
which are predicated factually on alleged environmental pollution) should have been heard
through an ordinary proceeding, and were thus improperly joined with claims under EMA
Article 43 and tried jointly in an oral summary proceeding.
c. Alleged Departure from Applicable Procedure In Connection
With Judicial Inspections
Under Ecuadorian procedure, a judge is sovereign in his court and is vested with
ample discretion to order the production of evidence in any form and at any stage of the
proceeding prior to issuance of a final judgment. But for a few exceptions, none of which
applies here, the parties cannot impose restrictions on the judge’s discretion regarding
evidentiary proceedings. Claimants thus err when they contend that the Court adopted and
bound itself to a so-called Protocol that the parties to the Lago Agrio litigation had adopted
by mutual agreement to streamline the process of the large number of judicial inspections
each of them had requested.
d. Alleged Retroactive Application of the EMA
Article 43 of the EMA, in force since 1999 and one of the legal bases invoked by
the Lago Plaintiffs in their 2003 complaint, is procedural in nature, i.e., it mandates that
certain claims for damages predicated on environmental contamination, must be heard
through what is regulated by Ecuadorian procedure as “oral summary proceedings.” This
provision did not create any substantive rights. Claimants’ contention to the court
improperly applied the EMA retroactively fails to acknowledge the procedural nature of
the EMA (specifically, Article 43) and the legal bases of the Lago Agrio complaint and the
judgment, both of which are predicated on substantive rights set forth in various provisions
of the Civil Code and on the Ecuadorian Constitution.
e. Assessment of Evidence and Standard of Review at the Appellate
Level
A court hearing an appeal in a summary oral proceeding may consider only
evidence that has been lawfully requested, ordered and submitted during the proceedings
before the lower court. There is no evidentiary phase at the appellate level of an oral
summary proceeding. The appellate court thus has no competence to hear and rule on an
issue if it does not form a part of the merits of the proceeding.
Chevron submitted voluminous documentary evidence to the trial court in support
of its allegations of ghostwriting of the judgment by the Lago Agrio Plaintiffs and fraud

4
surrounding the Cabrera report and the Calmbacher report. These submissions were
untimely and largely comprised of inadmissible evidence under applicable rules of
procedure. The appellate panel was therefore barred from considering as evidence the
“fraud” documents that Chevron unilaterally submitted to the lower court, and those
submitted post-Judgment in the course of its appeal from the Judgment below.
However, Ecuadorian law provides for at least two effective remedies to address
the alleged fraud or comparable violations of due process and other constitutional rights by
way of (i) the cassation appeal to the National Court of Justice (“National Court”), and (ii)
the extraordinary action for protection before the Constitutional Court. In fact, the
National Court can, and presumably will, review Chevron’s allegations of fraud and
procedural misconduct pursuant to its powers under Article 3 of the Law of Cassation.
Should the National Court deny Chevron’s cassation appeal, Chevron would have an
opportunity to file an extraordinary action for protection before the Constitutional Court,
which can and would conduct an examination of, and redress any alleged violation of due
process during the course of the Lago Agrio litigation.
f. Alleged Award of Extra Petita Damages
The principle of congruence in Ecuador does in fact mandate that there must be a
correlation between a judgment and the relief requested in the corresponding complaint as
well as the defenses raised in the answer to such complaint (the litis). There is, however,
no requirement that the complaint identify the specific form of reparation that the judgment
should order to remedy the alleged harm. The complaint must only specify “the thing,
quantity or act that is requested,” and the judgment must order reparation that is
commensurate and consistent with the subject matter of the case in question and the relief
requested.
The Lago Agrio action was brought for damages arising, inter alia, from the
deterioration to the environment, including the biodiversity with all its constituent
elements, and to the health of its inhabitants. The relief requested in the Lago Agrio
Complaint is classified in two general categories: (i) “The elimination or removal of the
contaminating substances that still threaten the environment and the health of the
inhabitants”, and (ii) “The remediation of the environmental harm caused, pursuant to
Section 43 of the [EMA].”
Each of the categories of damages that Claimants refer to as extra petita, i.e., the
construction of a potable water system, the treatment of people who suffer from cancer,
and a program for reconstruction of the community, is directly related to the harm that the
complaint explicitly alleges as attributable to the environmental contamination and the
resulting harm to the health of those who inhabit the contaminated areas and the culture of
the affected indigenous communities. All of them are evidently comprised within the
second of the two general categories of damages identified in the prayer for relief of the
Lago Agrio complaint.
g. Piercing of the Corporate Veil in Ecuador
Piercing of the corporate veil is a measure generally available to Ecuadorian courts
to prevent cases of fraud or abuse of the corporate separateness. In fact, while Ecuadorian
law upholds the principle of separate legal personalities (i.e., a corporation is treated as a

5
legal person distinct from its shareholders), it also recognizes the courts’ prerogative to lift
the corporate veil of a business organization when the corporation is used as a vehicle to
promote abuse of the law or to defraud, or where recognition of corporate separateness
would lead to an inequitable result.
According to Ecuador’s Law of Companies, piercing the corporate veil is only
applied as a sanction to impute liabilities of the corporation whose corporate separateness
is being disregarded to its shareholder/s. This measure is not intended to benefit the
shareholders in any way, or to place them in the shoes of the disregarded company.
h. Alleged Refusal to Hold Hearings To Address Purported Essential
Errors in Expert Reports
The Ecuadorian Code of Civil Procedure (“CPC”) provides that, where an expert
report is alleged to contain an “essential error,” the Court must –either sua sponte or on
motion of a party— provide for the correction of such error by another expert. The
existence of “essential error” must be proven summarily. Ecuadorian procedure further
provides that motions interposed for the purpose of disrupting or delaying the proceedings,
or causing prejudice to the opposing party, shall be denied and could subject the moving
party to applicable sanctions.
Chevron filed no less than twenty six (26) allegations of essential error, challenging
the reports filed by experts appointed by the court at the Plaintiffs’ request. The court
granted 13 of Chevron’s 26 requests and each time opened a separate summary proceeding
to examine Chevron’s allegations of “essential error.” The Court found that Chevron’s
challenges were predicated on largely identical –even verbatim— contentions, including
legal arguments and allegations that Plaintiffs’ experts ignored the Protocol. In my
opinion, the Court correctly concluded that Chevron’s systematic barrage of repetitive
challenges had been filed for the purpose of disrupting and delaying the proceedings, and
appropriately declined to grant further requests for a summary evidentiary proceeding,
deferring adjudication of Chevron’s motions to the time of the final judgment.
3. Analysis
Appropriate time to rule on res judicata and jurisdiction/competence defenses
8. Claimants argue that certain defenses raised in their answer to the complaint
in the Lago Agrio proceedings--specifically, the defenses alleging res judicata and
the court’s lack of jurisdiction/competence— should have been decided as a
preliminary matter and not deferred until judgment. This argument is contrary to
applicable rules of procedure.
9. Under the Ecuadorian legal system, legal defenses raised by a defendant to
contest the plaintiff’s claims are known as “exceptions” (article 99 CPC 2005 and
article 103 CPC 1987).1
These exceptions are divided into two classifications:
dilatory (article 100 CPC 2005) and peremptory (article 101 CPC 2005).2
1
While the concept of “exception” (defense) originally constitutes a specific form of exercise of the
right to be heard (see Ex. 1, E. VÉSCOVI, Teoría General del Proceso, Bogotá: Temis at 87), in the

6
10. “Dilatory” exceptions include defenses addressed to either: (i) the judge, such
as lack of competence, (ii) the plaintiff, such as lack of legal standing, (iii) the
defendant, etc.3
11. “Peremptory” exceptions include: all defenses relating to the extinction of the
relevant obligation (by settlement, for example), and the res judicata defense (article
101 CPC 2005).4
12. As a general rule, all exceptions must be raised in defendant’s answer to the
complaint (article 101 and 102 CPC 2005) and must be addressed in the judgment
(article 106 CPC 2005).5
13. Res judicata. The res judicata defense is subject to the same general rule as
to the time when it is to be addressed by the court. The existence of res judicata
must therefore also be decided in the judgment (articles 106 and 273 CPC 2005).6
14. Jurisdiction or competence. Article 1 of the current CPC provides as
follows (emphasis added):
Jurisdiction, that is to say, the power to administer justice,
consists of the public authority to judge and enforce judgments
on a specific matter, an authority that falls on the magistrates
and judges established by law.”
Ecuadorian civil procedural system it generally refers to the defendant’s objections to the action brought and
the claims set forth by the plaintiff. Case-law decisions have clarified the concepts of defense and exception.
2
RLA-198, Code of Civil Procedure, Art. 99 (“[Types of Exceptions].- The exceptions are dilatory or
peremptory. The Dilatory exceptions are those that tend to suspend or delay a decision on the merits, and
peremptory, those which extinguish in whole or in part the cause of action to which the complaint refers to.”)
3
RLA-198, Code of Civil Procedure, Art. 100 (“[Dilatory Exceptions].- The most common dilatory
exceptions are, relative to the judge, such as lack of competence; or relative to the plaintiff, such as lack of
legal standing, legal incapacity, or lack of power of attorney; or regarding the defendant, such as the right to
require prior exhaustion of remedies against principal debtor [excusión] or priority; or the way the action was
filed, such as contradiction or incompatibility of actions; or regarding the subject matter of the complaint,
such as opposing a petition made before the legal term is due; or the cause of action or the manner of its
substantiation, such as when it is requested that the proceedings be consolidated so as to not divide the cause,
or that the cause be given another treatment. ”).
4
RLA-198, Code of Civil Procedure, Art. 101 (“[Perentory Exceptions].- The exceptions will be
presented with the answer to the complaint . The most common perentory exceptions are the ones seeking to
assert that the obligation has been extinguished by one of the methods provided by the Civil Code, and res
judicata.”).
5
The provision that determines that all exceptions, whether peremptory or dilatory, must be decided
in the judgment is derived from Supreme Decree 2070, published in Official Gazette No. 735 of December
20, 1978.
6
RLA-198, Code of Civil Procedure, Art. 106 (“[Treatment of the exceptions and the
counterclaims].- The exceptions and the counterclaims will be discussed at the same time and in the same
manner as the complaint, and will be decided in the sentence.”); C-260, Code of Civil Procedure, Art. 273
(“The judgment shall resolve only the claims and defenses that formed the basis of the dispute and any
incidental proceedings brought during the course of the procedure whose disposition could be delayed until
the judgment without detriment to the parties.”).

7
Competence is “the extent to which such authority is
distributed among the various tribunals and courts according to
territory, things, persons, and degrees.” (Emphasis added.)
15. “Jurisdiction” thus refers to the vesting of public authority (adjudicatory
power) in the person who acts as judge in a proceeding. An exception of lack of
jurisdiction deals with the question of whether the person acting in the proceeding as
judge was lawfully designated to exercise judicial powers and has not subsequently
forfeited his right to do so.
16. “Competence,” in contrast, refers to the scope or extent of the specific judicial
powers conferred by law on the person vested with jurisdictional authority. These
judicial powers are divided up and distributed among judges on the basis of territory,
subject matter, persons, and degree (i.e., “instance” or level, such as trial and
appellate levels.)
17. The elements of jurisdiction and competence constitute “substantive
formalities” required in all judicial proceedings.7
(Art. 346 CPC 2005). Judges are
thus charged with the affirmative obligation, and vested with the authority to declare
themselves unable to adjudicate a matter whenever the matter before them is outside
of the scope of their jurisdiction or competence, even in the absence of a proper
objection by a party. In such cases, the judge must turn over the case to a competent
court (unless the court lacks subject matter jurisdiction, in which case it should
declare the nullity of the proceeding.)8
7
The following are substantive formalities common to all proceedings and instances:
1. Jurisdiction of the authority who hears the proceeding;
2. Competence of the judge or tribunal before which the trial is heard;
3. Legal capacity;
4. Service of the complaint on the defendant or his/her legal representative;
5. Opening of the discovery stage, when the alleged facts have to be justified and
the law provides for said term;
6. Service on the parties of the discovery order and the judgment, and,
7. Formation of the court with the number of judges provided for by law. (see
RLA-198, Code of Civil Procedure, Art. 346).
See also RLA-198, Code of Civil Procedure, Arts. 347 and 348, providing for special substantive
formalities by type of proceedings.
8
Judges are personally liable for: (i) any omission of substantial formalities; and (ii) failure to declare
the nullity of the proceedings –whatever the cause might be– in cases that require nullification by statute. See
RLA-198, Code of Civil Procedure, Arts. 355-57: Art. 355 (“The judges of first instance who, while issuing
an order or judgment, found that the declaration of nullity applies, shall order placing the proceeding in the
state in which it was when the formality that underlies the declaration was omitted and shall sentence the
person causing it to payment of the cost of the annulled actions.”); Art. 356 (“Any substantive omission of a
formality shall make the judges that incurred in it personally liable, who will be sentenced to pay the
respective costs.”); Art. 357 (“When a judge, who must declare the nullity, does not declare it, said judge
must pay the costs incurred since he issued the order or judgment in which he should have ordered the
reinstatement of the process. Such costs also include the rights covered by the State.”). Accordingly, no
judge would reasonably wait until the completion of the proceedings to rule on an objection to jurisdiction or
competence if the judge’s lack of competence over the matter in question were apparent.

8
18. However, should a defendant challenge the jurisdiction or competence of the
presiding judge by way of a defense,9
as a general rule the appropriate time for the
court to rule on such exception would be in its judgment.10
Typically the first two
recitals of any court judgment will address issues of jurisdiction and competence, and
of the validity of the proceeding.
19. In sum, a defendant’s defenses in his answer do not require a preliminary
decision resolving them prior to the judgment. In the case of a perceived breach of a
substantive formality, a judge may –in the exercise of his duties and not only upon a
request by a party– make the decision he deems appropriate prior to issuance of the
judgment, including a writ declaring the nullity of the proceedings for lack of subject
matter jurisdiction.11
Allegedly Improper Joinder of Claims
20. Claimants aver that the Court improperly accepted the joinder or
consolidation in one proceeding of claims of different nature which they argue should
have been prosecuted through separate proceedings. Specifically, Claimants allege
that the complaint raises both (i) tort claims under the Civil Code and Constitution
and (ii) environmental claims under the EMA, and that these separate types of claims
should not have been joined together in a single judicial proceeding. They contend
that tort claims must be heard through the “ordinary proceeding,” whereas EMA
claims must be heard through the “oral summary proceeding.”12
Claimants’
argument is incorrect as a matter of law.
21. Ecuadorian legislation recognizes three types of procedural joinder: that of (i)
claims, (ii) parties and (iii) proceedings.13
Joinder is authorized and regulated by the
9
A party may also allege lack of jurisdiction or lack of compentence through an ancillary action
within the same proceeding, by way of a cassation appeal (see RLA-198, Code of Civil Procedure, Art. 345
with regard to an appeal (“The omission of any substantive formalities determined in this paragraph, or
violation of the procedure referred to in Article 1014 may be the basis for filing an appeal’); and C-316,
Cassation Law, Art. 3, item 2 with regard to a cassation appeal (“A petition for cassation can only be based
on the following grounds: 2. Improper application, lack of application, or erroneous interpretation of
procedural rules, when they have irreparably invalidated the process or caused lack of a proper defense,
provided that they influenced the decision in the case and the respective invalidity would not have been
legally confirmed”), or through a separate legal action. (see RLA-198, Code of Civil Procedure, Arts. 350,
paragraph 3, and 299 et seq.) An action for nullification of a final judgment is admissible only by reason of
lack of jurisdiction or lack of competence, lack of legal capacity, or failure to serve the complaint in cases in
which the proceedings have continued and have ended in contempt of court (Arts. 299 and 350, paragraph 3,
Code of Civil Procedure), provided that a complaint has been filed.
10
RLA-198, Code of Civil Procedure, Art. 106; C-260, Code of Civil Procedure, Art. 273.
11
Central among the conditions for a declaration of nullity is the need for the alleged defect to be a
factor of material significance in the decision on the case (RLA-198, Code of Civil Procedure, Arts. 349,
351, 352, item 2 and 1014).
12
Claimants’ Memorial on the Merits ¶ 175.
13
See Ex. 2, J. LOVATO. Programa Analítico de Derecho Procesal Ecuatoriano. Editorial de la Casa
de la Cultura Ecuatoriana: Quito, 1962 at 335-374; and Ex. 3, V. PEÑAHERRERA, Lecciones de Derecho
Práctico Civil y Penal, Tomo tercero, Editorial Universitaria, 1960 at 207.

9
CPC, and is based on the constitutional principle of judicial economy.14
As a general
rule the Ecuadorian legal system allows and even encourages joinder of different
claims between the same parties to increase judicial economy and to further the
effectiveness of Ecuador’s administration of justice.15
22. In respect of the joinder of claims, both CPC 2005 and CPC 1987 allow
differing or alternative claims to be brought in the same complaint, provided they (i)
are neither contradictory or incompatible, (ii) nor necessarily require different
proceedings. Notwithstanding, a plaintiff could nonetheless always join claims that
otherwise should be heard in different proceedings by requesting that they all be
heard through ordinary proceedings.16
(After the 1999 EMA however, all
environmental claims had to be heard in summary oral proceedings (see ¶¶25 and 26,
infra)).
23. Since the enactment of the 1907 CPC,17
Ecuadorian civil procedure has
contained a residual provision allowing any claim or action, not otherwise subject to
a special proceeding, to be heard through an ordinary proceeding. A similar provision
(article 63) was in effect in CPC 1987 and another, identical, provision (article 59) is
currently included in CPC 2005.18
24. There is not now, nor has there ever been, any provision in the Ecuadorian
legal system that, as a general rule, assigns disputes alleging damages for a civil
offense or a tort to a specific type of proceedings. Thus, except when provisions to
14
The principle of procedural economy is enshrined in article 169 of the Ecuadorian Constitution
(RLA-164, Constitution of Ecuador 2008, Art. 169 (“The procedural system is a means for the realization of
justice. Procedural rules enshrine the principles of simplification, uniformity, efficiency, immediacy, celerity
and judicial economy, and shall make due process guarantees effective. Justice shall not be sacrificed for the
mere omission of formalities.”)).
15
In this regard, the longstanding view of the Supreme Court of Justice is that (emphasis added): “The
joinder of civil actions or proceedings is a right which, within the restrictions provided by law, is given to the
parties in their own interests, since society has only an indirect and secondary interest therein, arising from
the [resulting] reduction in the number of lawsuits and conflicts due to contradictory decisions relating to the
same disputed issue.” Cited by J. Lovato, Programa Analítico de Derecho Procesal Ecuatoriano at 340 (see
Ex. 2). The author, however, believes that society’s interest in such joinders is not merely indirect or
secondary, as “society has a direct and fundamental interest in preventing contradictory decisions, because its
members would otherwise not know what to rely on and the Judiciary would lose respectability and trust.”
(see Id. at 341).
16
See Ex. 4, Code of Civil Procedure 1987, Art. 75 (“Diverse or alternative actions can be brought in
one same claim, but they may not be contrary or inconsistent, nor is it necessary that they require different
substantiation, unless, in the latter case, the plaintiff requests that all be substantiated via ordinary
proceedings.”) See also, Ex. 31, Troya Cevallos, Alfonso. Elementos de Derecho Procesal Civil. Volume I.
Ediciones de la Universidad Católica, Quito. 1978. p. 269.
17
Article 90 of the Code of Civil Procedure provided: Any judicial dispute not subject to a special
procedure under this Code shall not be litigated through a special procedure and shall be heard in ordinary
proceedings. (See Ex. 5, Code of Civil Procedure, Legislative Decree 0. Authentic Gazette 1907, October 19,
1907).
18
Ex. 4, Code of Civil Procedure 1987, Art. 63.- Any legal dispute that under the Law, has no special
procedure shall be ventilated in ordinary proceedings.; RLA-198, Code of Civil Procedure 2005, Art. 59
(“Legal disputes for which the law does not prescribe any special proceedings shall be heard in ordinary
proceedings.”).

10
the contrary exist for specific cases, general civil tort actions have been heard, and
continue to be heard, as ordinary proceedings.
25. However, as of the EMA’s entry into force on July 30, 1999,19
Art. 43 thereof
sets forth in relevant part the following procedural mandate: “Claims for damages
originating from harm to the environment shall be heard in verbal summary
proceedings.”20
26. Without making any distinction as to the type of damage –whether actual
historical damages or contingent future damages – or legally protected right, Article
43 of the EMA states that any environmental damage litigation must, by reason of its
nature, be heard through oral summary proceedings.21
Consequently, in the case of a
joinder of claims, if all claims are based on some form of environmental damage they
must be heard as oral summary proceedings -- without regard to whether the damage
alleged was actual or contingent. Moreover, if a post-EMA complaint alleging any
form of environmental damage were to be heard via a different type of proceeding,
this could constitute a breach of appropriate procedure.22
27. Chevron attempts to draw a false distinction between the various types of
claims asserted. The complaint alleges both actual and contingent harm to the
Plaintiffs (including harm to their health, lives, culture, property, ecosystem and
livelihood) and actual present harm to the environment resulting from the existence
of contamination produced by oil operations. All claims are thus predicated on the
existence of past, current and predictable future environmental contamination, and
must accordingly be heard through oral summary proceedings pursuant to Article 43
of the EMA. There is no possible improper joinder of claims in this case insofar as
the claims asserted in the complaint are neither (i) mutually contradictory or
incompatible, nor (ii) must be heard through different proceedings.
28. Accordingly, there was no inappropriate joinder of claims since, as of the date
of filing of the complaint, all claims were required to be heard in summary oral
proceedings.
Practice of Judicial inspections and appointment of experts under Ecuadorian law
29. This section examines the following claims by the Claimants:
19
C-073, 1999 Environmental Management Act, Official Registry No. 37, July 30, 1999.
20
Article 7, item 20 of the Civil Code provides as follows: "Laws concerning the adjudication of, and
the observance of formalities in, judicial proceedings supersede their prior equivalents as of their entry into
force." See C-034, Civil Code, Art. 7 item 20.
21
There are certain specific characteristics that distinguish oral summary proceedings from an
ordinary proceeding, particularly as to: (i) the oral nature of the answer to the complaint; (ii) the requirement
that ancillary actions are to be decided in the judgment; and (iii) the shortening of certain periods. There is no
limitation as to amount or type of dispute in the case of private parties agreeing to summary oral proceedings.
22
This provision is not applicable to actions for environmental damage aimed against the State and
other public-sector institutions which must be heard in accordance with the procedure set forth in the Law of
Administrative Jurisdiction, Law No. CL 35, Official Gazette No. 338 of March 18, 1968 (See Ex. 6)

11
 The Court departed from applicable procedure when it chose to ignore the
agreement reached by the parties for an evidence-gathering judicial
inspection process (the “Protocol”) by prematurely ending the judicial
inspections in response to allegedly improper pressure from the Plaintiffs
and the Government.23
 The Court failed to appoint the experts selected by the parties. Instead, it
unilaterally appointed a global expert of its choice, thereby engaging in
another violation of due process. 24
 The global expert appointed by the Court was not a registered expert with
the Superior Court.25
30. Assuming that the facts alleged are correct, none of these claims of
procedural error is supported by Ecuadorian law.
31. First, the Protocol was not and could not have been binding on the court. In
fact, as a matter of Ecuadorian law the parties cannot constrain a court by means of
an agreement designed to govern certain aspects of a judicial proceeding. A judge is
sovereign in his or her court and is called to administer judicial proceedings in
accordance with applicable rules of procedure.26
Applicable rules of procedure vest
the judge with ample discretion to order the production of evidence of any kind, at
any stage of the proceeding prior to the issuance of a judgment.27
The court was thus
free to adopt and follow the Protocol, as well as to modify it when the circumstances
so required.28
32. The parties agreed upon a Protocol to streamline the large number of judicial
inspections originally requested to the Court.29
Both parties submitted a copy of such
Protocol to the Court, which held the parties to their agreement by a “judicial decree”
dated August 26, 2004.30
Judicial decrees are procedural orders by which a court
regulates and controls the progress of the lawsuit (e.g., accepting the production of
23
Claimants’ Memorial ¶¶ 183 et seq; Claimants’ Supplemental Memorial on the Merits ¶ 198.
24
Claimants’ Memorial ¶¶ 204, 214-225; Claimants’ Supplemental Memorial ¶ 198.
25
Claimants’ Memorial ¶ 224.
26
See RLA-198, Code of Civil Procedure, Arts. 242-249, regarding the judges’ prerogatives
specifically with respect to judicial inspections.
27
See RLA-198, Code of Civil Procedure, Art. 118 (“Judges can ex officio order the evidence they
deem necessary to clarify the truth, at any stage of the proceedings, before judgment. Except for the
examination of witnesses, which cannot be ordered ex officio, but the judge may reexamine a witness or
request explanations from witnesses who have already declared legally.”).
28
This general rule admits one exception, not applicable here. Article 252 of the Ecuadorian Code of
Civil Procedure allows the parties to choose, by mutual agreement, a specific expert for a particular task. In
such case the court is bound to appoint the expert chosen by the litigant parties. The parties can also agree
that more than one expert be appointed for a particular task, in which case the court must appoint the number
of experts agreed upon by the parties’ mutual agreement. See C-260, Code of Civil Procedure, Art. 252
(“The judge shall appoint a single expert who shall be a person of his choosing, from among those registered
in the respective high courts. However, the parties may mutually agree to choose the expert or request the
appointment of more than one for the procedure, agreement that will be binding on the judge.”)
29
See C-177, Terms of Reference.
30
See C-496, Lago Agrio order, August 26, 2004, 9:00 a.m., at 1.

12
documents and ordering their incorporation into the case record, or scheduling a
specific procedure such as a judicial inspection.)31
These procedural orders are not
equivalent to a judgment or interlocutory decision, and do not become final or res
judicata for any purpose, including a right of appeal. Unlike final or interlocutory
decisions, judicial decrees can thus be subsequently amended or rescinded by the
court if, in its opinion, circumstances so require.32
Claimants’ argument that the
Court was powerless to modify the case procedure by amending its prior procedural
order is simply wrong.33
33. Moreover, Claimants’ argument is at odds with what was clearly both sides’
understanding as to the nature of the Protocol. The record shows that both Chevron
and Plaintiffs understood the Protocol to be a non-binding guideline that could be
amended throughout the course of the judicial inspections. In fact, both parties
submitted to the court “tentative schedules” for the judicial inspections,34
which the
court adopted as “tentative.”35
Chevron itself submitted suggestions for conducting
the JIs that departed from the guidelines set out in the original Protocol.36
Likewise,
Plaintiffs expressly confirmed with the court that the Protocol and its annexes
provided merely a general framework for the performance of the judicial inspections
as a framework that was not binding and did not preclude the possibility of
amendment.37
31
See RLA-198, Code of Civil Procedure, Art. 271 (“Decree is the ruling that the judge issues to
manage the case, or which orders any procedure.”)
32
See RLA-198, Code of Civil Procedure, Art. 296 (“A judgment becomes enforceable: 1. If an appeal
is not filed within the legal term; 2. For withdrawal of the appeal; 3. For failure to substantiate an appeal; 4.
If the instance or appeal is declared abandoned; and, 5. Upon adjudication of a matter by the last instance;”)
and Art 298 (“The judicial orders (autos) whose encumbrance cannot be repaired in the judgment, shall be
enforced in cases 1, 2, 4 and 5 of Article 296.”)
33
See Claimants’ Memorial on the Merits ¶ 223. Claimants refer to Code of Civil Procedure, Art. 292
in support of their proposition that judicial decrees cannot be subsequently modified. RLA-198, Code of
Civil Procedure, Art. 292 (“Petitions that contravene the provisions of the preceding article, or have the
purpose of altering the meaning of the judgments, orders or decrees, or delay the progress of the litigation, or
maliciously injure another party, shall be dismissed and sanctioned as provided for in the following article.)
This provision has nothing to do with a judge’s competence to manage the proceeding; it only relates to the
sanction that a judge should impose to that who makes an abusive use of the procedural recourses aiming at
altering the meaning of the judicial decisions, delaying the proceeding, or maliciously injuring the
counterparty.”) This provision, however, lends no support whatsoever to the foregoing proposition.
34
See, e.g., Ex. 7, Lago Agrio Record at 6575-79 (Brief filed on March 29, 2004, at 11h59, executed
by counsel to both parties (“1. In compliance with your order issued on February 26, 2004, at 15h00, the
parties have agreed to submit to your consideration a tentative schedule for the conduct of the judicial
inspections requested by the Plaintiffs and Defendants.”)) (emphasis added))
35
See, e.g., Ex. 8, Lago Agrio Record at 7889 et seq. (Judicial Order dated July 15, 2004, at 14h00
(“Add to the record the tentative schedule for the judicial inspections… Additionally and regarding the
schedule, the court will try to fulfill it in the order it was proposed.”)) (emphasis added))
36
See, e.g., Ex. 9, Lago Agrio Record at 8459 et seq. (Brief filed by Chevron confirming the lack of an
agreement between the parties concerning the role of an expert during the judicial inspections and making a
number of recommendations to the Court regarding procedure.).
37
See, e.g., Ex. 10, Lago Agrio Record at 9874 (Plaintiffs’ request dated October 4, 2004, at 17h58,
stating, “[a]s a consequence, Mr President, please instruct the experts explaining that the terms of reference
approved by the parties and their technical annexes provide a general framework whose implementation does

13
34. Second, any litigant party has a right to waive production of evidence which it
had previously requested. Every litigant party bears the evidentiary burden of
proving his or her allegations.38
Each party must thus offer and request the
production of evidence intended to satisfy his or her burden of proof. Ordinarily.
each party is also entitled to withdraw its previously granted request for production
of evidence (e.g., a judicial inspection, interrogation of a witness, etc.) for any reason
whatsoever, including a belief that it has already met its evidentiary burden of
proof.39
The risk taken is that, by so doing, a party might fail to meet its burden of
proof. This right stems from the Constitutionally-protected principles according to
which (a) it furthers judicial economy and (b) no party can be prohibited from doing
that which is not prohibited by law.40
There is no law or procedural rule that
prevents a party from requesting, or a court from granting, the withdrawal of one of
its earlier approved requests for evidence-gathering procedures, such as judicial
inspections, which it now considers duplicative and unnecessary.
35. Consistent with this principle, the Lago Agrio record shows that both parties
occasionally waived or failed to utilize a previously court-granted right to production
of evidence.41
36. Third, the court was free to order the appointment of an expert to conduct a
global examination of the allegedly contaminated area. As explained above,
Ecuadorian law vests every judge with ample powers to order the production of
evidence at any stage of the proceeding prior to the issuance of a final judgment, with
the ultimate purpose of uncovering the truth of the matter.42
37. Whenever a party requests that a court conduct a judicial inspection, the
appointment of a Court-designated expert is the sole prerogative of the presiding
judge.43
The purpose of a judicial inspection is precisely to provide the judge with an
not exclude the possibility that, at the request of a party or at the judge’s order, they have to make further
analysis or use other methods if technically justified.”).
38
RLA-198, Code of Civil Procedure, Arts. 113 and 114.
39
RLA-163, Civil Code, Art. 11 (“Rights conferred by law may be waived, provided that they only
regard the individual interest of the waiving party and that their waiver is not prohibited.”).
40
RLA-164, 2008 Constitution, Art. 66, Section 29, subsection (d). (“The following is recognized and
guaranteed to persons: 29. Freedom rights shall also include: d) No person shall be obliged to do anything
which is illegal or be forced to refrain from doing something which is legal under the law.”).
41
See Ex. 11, Lago Agrio Record at 9056 (Chevron’s letter, filed on August 31, 2004, withdrawing its
earlier request for the appointment of a translator and the performance of the corresponding translation –
subsequently ordered by the court.) The court granted Chevron’s motion on September 2, 2004, at 16h30
(see Ex. 12, Lago Agrio Record at 9173). See also Ex. 13, Lago Agrio Record at 8703 (Minutes of Judicial
Inspection of August 18, 2004, reflecting that the Plaintiffs had requested the admission of a certain witness’
testimony.) Plaintiffs subsequently withdrew their request. Chevron did not object. The court granted the
Plaintiffs’ motion.
42
RLA-198, Code of Civil Procedure, Art. 118 (“Judges can ex officio order the evidence they deem
necessary to clarify the truth, at any stage of the proceedings, before judgment. Except for the examination of
witnesses, which cannot be ordered ex officio, but the judge may reexamine a witness or request explanations
from witnesses who have already declared legally.”)
43
RLA-198, Code of Civil Procedure, Art. 243 (“Once the inspection has been ordered, the judge
shall, in the same Order, order the date and time of the diligence, and designate an expert only if it deems
necessary.”)

14
opportunity to witness first hand that which is at the heart of the controversy.44
The
court is accordingly given latitude (a) to appoint an expert to assist it, (b) to disregard
the expert’s report where it is inconsistent with the court’s own opinion based on
what it witnessed at the judicial inspection, or even (c) to sua sponte order a new
judicial inspection and/or the appointment of new expert/s.45
38. The Superior Court of Sucumbíos initially allowed the parties to propose the
appointment of a mutually agreed-upon expert, noting that in the absence of such
agreement the court would appoint an expert of its choice pursuant to applicable rules
of procedure.46
In fact, the parties failed to reach an agreement and the court
accordingly proceeded to appoint an expert, as mandated by the CPC (2005), Art.
252.47
Claimants’ contention that in doing so the court violated Art. 252 has no
support in Ecuadorian law.48
39. Finally, as to Claimants’ further contention that the court departed from
established procedure by appointing an expert whose name was not on a list of
experts registered with the local Superior Court, I must state that this contention is
decidedly frivolous. Indeed, the 2005 codification of the CPC of Ecuador added a
new requirement to Article 252 -- to wit, that all experts appointed by the court be
listed in a roster maintained by Ecuador’s Superior Courts. This provision, however,
had not yet been implemented by the time of the appointment of expert Cabrera and
no roster of experts was ever assembled or adopted by the country’s Superior Courts.
A list of experts on matters other than criminal law was later compiled and
implemented by the Judicial Council.
40. In the absence of the referenced list, Ecuador’s courts continued to regularly
appoint experts in the same manner as they had been doing it before the 2005
Codification of the CPC – as was done here. I have no knowledge of any statement
by the Supreme Court of Ecuador (now known as the National Court) rejecting or
objecting to the appointment of an expert simply because his or her name is not listed
in a non-existent roster.
Retroactive application of the EMA
44
RLA-198, Code of Civil Procedure, Art. 242 (“A judicial inspection is the examination or
reconnaissance made by the judge over the matter in dispute or at issue, to judge its condition and
circumstances.”)
45
RLA-198, Code of Civil Procedure, Art. 249 (“The judge may decide not to consider the opinion of
the expert or experts, when contrary to what he perceived by his senses in the recognition, and order that
another inspection be conducted with one or more experts.”)
46
See Ex. 8, Lago Agrio Record at 7889 et seq. (Judicial Decree of July 15, 2004, 14h00 ordering:
“Add to the record the tentative schedule for the judicial inspections… Additionally and regarding the
schedule, the court will try to fulfill it in the order it was proposed.”) (emphasis added)
47
See C-385, Minute of Appointment of Expert Richard Cabrera; see also C-260, Code of Civil
Procedure, Art. 252. (“The judge shall designate just one expert, whom he or she shall choose from among
those on the list to be provided by the Judiciary Council. However, the parties may, by mutual agreement,
choose the expert or request designation of more than one for the proceeding, which agreement shall be
binding on the judge.”)
48
Claimants’ Memorial ¶¶ 204, 214-225; Claimants’ Supplemental Memorial on the Merits ¶ 198.

15
41. Chevron claims that the Provincial Court of Sucumbíos illegally relied on a
retroactive application of the EMA. Again, Chevron’s claims are legally incorrect.
42. As explained above, EMA Article 43, in force since 1999 and one of the
legal bases invoked by the Lago Agrio Plaintiffs in their complaint, is procedural in
nature and did not create any substantive rights capable of being applied, or which
were in fact applied, retroactively.
43. In accordance with Civil Code Art. 7, procedural norms apply to ongoing
proceedings as of the time of entry into force.49
Accordingly, conducting the Lago
Agrio proceeding as an oral summary proceeding cannot be considered amount to a
retroactive application of EMA Article 43.
44. The Lago Agrio complaint was predicated on substantive rights set forth in
various articles of the Civil Code and Constitution which were in force well before its
filing. Civil Code articles providing substantive tort law norms have been in force
since the first edition of the Civil Code in 1861, and have been construed by
Ecuadorian courts as providing remedies for claims (contingent and/or already
materialized) arising from environmental damage.
45. The original Ecuadorian Civil Code of 186150
– an adaptation of the Chilean
code – drew its inspiration from French and Spanish legislation,51
heir to Roman
law,52
regulating the broad spheres of private law. From its first edition onwards, the
Civil Code has been divided into 4 books, the last of which contains a series of
articles headed “On Obligations in General and on Contracts”. These articles have
not been materially amended since their original version, except that a claim for
moral damages was added in 1984.53
46. As provided in article 1453 of our Civil Code, obligations arise from various
sources: contracts, implied contracts, offenses, torts, and the law itself.54
The Code
treats liability for breaches of contractual liability and for tort liability separately,
although providing certain common aspects.55
49
C-034, Civil Code, Art. 7(20) (“Laws concerning the hearing of and procedure in lawsuits shall
prevail over prior laws from the time at which they take effect.”).
50
The Code was enacted on December 4, 1860 and entered into force on January 1, 1861. See Ex. 14,
Cf. B. CEVALLOS, Historia del Derecho Civil Ecuatoriano, Quito: Talleres Gráficos Nacionales, 1968, v. 1 at
349.
51
See Ex. 15, R. KNUTEL, Influences of the Louisiana Civil Code in Latin America-70 Tul. L. Rev.,
1996 at 1445.
52
See Ex. 16, M. PLANIOL Y G. RIPERT. Tratado de Derecho Civil. t. 6. Cultural S.A.: La Habana,
1946, p. 12.
53
See Ex. 17, Law No. 171, published in Official Gazette 779 of July 4, 1984, added a few articles to
Book IV of the Code to regulate moral damages and compensation therefor.
54
In this regard, see Ex.18, A. ALESSANDRI ET. AL. Tratado de las Obligaciones. Editorial Jurídica
de Chile: Santiago, 2001, p. 29.
55
These general aspects relate to the effects of obligations regulated under Book IV, Title XII of the
Civil Code. In Ruling No. 168-2007 of April 11, 2007, case No. 62-2007, styled Andrade v. Conelec et al.,
the Administrative Litigation Division of the Supreme Court of Ecuador set forth the basic principles of this

16
47. Thus, we find in Book IV, Title XXXIII of the current Civil Code, articles
2214 (liability for one’s own acts) and 2229 (liability for hazardous activities).56
These articles:
(i) are part of the general system of civil tort liability;
(ii) are identical to articles 2241 and 2256 under the Civil Code Codification
published in Official Gazette Supplement No. 104 of November 20, 1970 and
in effect at the time of the filing of the Lago Agrio complaint; and
(iii) preserve the language included in the original provisions set forth in the
1861 Civil Code.
48. The fundamental rule of tort liability – that obligation which arises from one’s
own actions and is based on the principles of corrective justice57
– is set forth in
article 2214 [previously 2241] of the Civil Code, as follows:
Whoever commits an offense or tort resulting in harm to
another shall indemnify the affected party, without detriment
to the penalty provided by law for such offense or tort.58
49. Neither this nor any other provision governing liability for tort and civil
offenses distinguishes among the many divergent varieties of damage that may be
subject to indemnification under this article. To the contrary, as indicated above
these Civil Code provisions contain broad language encompassing both actual
present and contingent future harm to property,59
persons60
and the environment.61
concept, including liability for one’s own actions and liability arising from hazardous activities. (see Ex. 19,
Ruling No. 168-2007 of April 11, 2007, case No. 62-2007, styled Andrade v. Conelec et al.). This view was
reiterated in: Supreme Court of Justice of Ecuador. Administrative Litigation Division. Ruling. Case File
414. Official Gazette, Supplement No. 620 of June 25, 2009 (see Ex. 20); Supreme Court of Justice of
Ecuador. Administrative Litigation Division. Case File 84. Official Gazette, Supplement No. 220 of June 23,
2010 (see Ex. 21); National Court of Justice of Ecuador. Administrative Litigation Division. Cassation Case
File 280. Official Gazette, Supplement No. 147 of May 16, 2011 (see Ex. 22).
56
The Civil Code currently in effect is Codification 010-2005, which was published in the Official
Gazette, Supplement No. 46 of June 24, 2005 (See RLA-163, Civil Code, Arts. 2214, 2229).
57
Ex. 24, Barros, Enrique. Tratado de Responsabilidad Extracontractual. Editorial Jurídica de Chile,
at 40.
58
RLA-163, Civil Code, Art. 2214.- He who has committed an intentional or unintentional tort which
has inflicted harm on another is obliged to indemnify, notwithstanding the penalty the laws may assess for
the intentional or unintentional tort.
59
In Ruling No. 187, rendered in ordinary proceedings for damages No. 252-99 brought by Segundo
Sánchez Monar et al. against Petrocomercial and ConGas S.A., the First Division for Civil and Commercial
Matters of the former Supreme Court of Justice confirmed the existence of civil tort for damage to, among
others, plaintiffs’ property arising from the failure by Petrocomercial to perform “its obligations under
regulatory standards[,] leading to the explosion of a gas tank and the resulting fire…” Ex. 26, Supreme Court
of Justice (Ecuador), Ruling No. 187 of April 28, 2000 in case No. 252-99, styled Segundo Sánchez Monar v.
Petrocomercial and ConGas S.A., published in Official Gazette 83 of May 23, 2000.
60
In its January 21, 1983 ruling rendered in the ordinary proceedings for damages brought by Eva
Cedeño against Constructora Santos, the Supreme Court established defendant’s tort liability for the death of
plaintiff’s daughter when “she was walking along the esplanade of the Salinas seaside resort and, upon

17
50. With the 1983 reform of the 1978 Constitution,62
and specifically in new
Article 19, item 2 of the amended Constitution,63
the right to live in a pollution-free
environment was for the first time introduced into the Ecuadorian legal system,
creating an express Constitutional cause of action for environmental remediation,
using the mechanisms established in secondary legislation, such as recovery of
damages for offenses and torts.
51. Any assertion that the substantive right to a remedy for environmental
damage only became available in Ecuador upon enactment of the EMA is
unsustainable. Case-law decisions predating the enactment of the EMA favored
interpreting the broad provisions of the Civil Code as encompassing claims for
environmental damage within the scope of traditional tort claims. In fact, in the tort
lawsuit brought by Angel Isaac Gutiérrez and another against Compañía Molinos
Champión S.A (“MOCHASA”)64
, the Division for Civil and Commercial Matters of
the former CSJ, when awarding damages against the defendant, held:
“[B]y establishing a large-scale hog farm contiguous to the
property in which the inn is located, and through negligence in
failing to take technical or sanitary preventive measures for the
treatment of excreta and organic waste from the
aforementioned hog farm, the farm owners have caused the
damage described by plaintiffs in their complaint and have
violated specific constitutional provisions, such as article 19,
item 2 of the Constitution, which states: "Without detriment to
other rights needed for the full moral and material
development of the individual, the State guarantees: [...] 2. The
right to live in an environment free of pollution. The State has
the duty to ensure that this right is not affected and to
safeguard the conservation of nature. The law shall establish
restrictions on the exercise of certain rights or liberties in order
to protect the environment." In the final analysis, MOCHASA
has violated articles 2241 and 2242, in concordance with
passing in front of a building under construction known as El Mirador, she was struck on the head by a
carpenter’s hammer, which caused a fatal impact.” Ex. 27, Judicial Gazette. Year LXXXIII. Series XIV. No.
2. p. 399.
61
As analyzed below, in the case styled Angel Isaac Gutiérrez and another v. Compañía Molinos
Champión S.A., the Supreme Court determined the existence of tort for a violation of the right to live in a
healthy environment. Supreme Court of Justice. Division for Civil and Commercial Matters. RLA-285,
Angel Gutierrez v. Compañía Molinos Champion S.A (MOCHASA), Ecuadorian Supreme Court, Civil and
Commercial Chamber, Decision, Official Gazette No. 1, Sep. 29, 1993p. 11.
62
Ex. 28, V. SERRANO, Ecología y Derecho, Quito: Fundación Ecuatoriana de Estudios Sociales, 1988
at 260.
63
C-453, 1978 Constitution as amended in 1983, Art. 19: Without detriment to other rights needed for
the full moral and material development of the individual, the State guarantees: [...] 2. The right to live in an
environment free of pollution. The State has the duty to ensure that this right is not affected and to safeguard
the conservation of nature. The law shall establish restrictions on the exercise of certain rights or liberties in
order to protect the environment.
64
RLA-285, Angel Gutierrez v. Compañía Molinos Champion S.A (MOCHASA), Ecuadorian
Supreme Court, Civil and Commercial Chamber, Decision, Official Gazette No. 1, Sep. 29, 1993 at 11.

18
article 1480, of the Civil Code, as well as the provisions of the
Code of Health, the Water Act and its implementing
regulations, and the Environmental Pollution Prevention and
Control Act.”
52. The court’s resulting order awarding indemnification damages was based on
the commission of a civil tort creating liability under articles 2241 and 2242 [now
2214 and 2215] of the Civil Code, both articles having been in effect at the time of
filing of that complaint and also when the Lago Agrio complaint was filed.65
The
Supreme Court found that the illicit act was in breach, inter alia, Art. 19(2) of the
Ecuadorian Constitution in force at the time of the filing of the Lago Agrio
complaint.
53. A landmark case known as “Delfina Torres” marked a turning point in the
jurisprudential analysis of tort liability associated with risky activities under Civil
Code Art. 2229 [previously, 2256].66
That case involved an exhaustive analysis (and
indeed expansion) of the tort liability system in Ecuador, confirming the legal
presumption of defendant’s fault for having carried on hazardous activities resulting
in environmental damage.67
54. Delfina Torres involved claims, which the court granted, demanding that
defendant’s mandated remediation include constructing a wide array of public
infrastructure projects: i.e., a sewage system, sewage treatment plant, rainwater
treatment plant, concrete riverbank rock fill, reinforced concrete retaining wall,
health center, health center equipment, sidewalks and curbs and flights of stairs,
multiuse sports fields with bleachers, vehicular stone paving of streets, forest reserve
and public park lighting, forest reserve improvements, pedestrian paths and overpass,
modern secondary school and equipment.
55. The legal bases for the court’s judgment included:
(i) article 22, item 2 of the Constitution of Ecuador (right to live in a healthy
environment),68
and
(ii) the Civil Code provisions regarding tort liability, including articles 2241
[currently 2214] (liability for one’s own acts), 2243, 2244, 2247 and 2256
[currently 2229] (liability arising from hazardous activities).
65
1970 Codification of the Civil Code.
66
C-1586, Supreme Court of Justice (Ecuador). First Division for Civil and Commercial Matters,
decision No. 229-2002 of October 29, 2002, in case No. 31-2002, Comité Delfina Torres vda. de Concha and
another v. Petroecuador et al., published in Official Gazette 43 of March 19, 2003 (“Delfina Torres”).
67
In brief, the Court held that: “As further examined below, article 2256 [now 2229] of the Civil Code
provides for tort liability arising from hazardous activities in which fault is presumed to exist, thus exempting
the injured party from having to provide evidence of negligence, carelessness or incompetence. In this case,
the defendant is required to show that the event was due to force majeure or resulted from the intervention of
an extraneous element or occurred solely through the fault of the injured party.” Ídem.
68
The Codification of the 1978 Constitution, approved on May 29, 1996, was in effect at the time. The
language of the provision in question is identical to that of article 19, item 2 of the 1978 Constitution,
introduced through the 1983 reform and subsequently present in later codifications.

19
56. The judgment held as follows:
The party incurring in tort liability is required to compensate
the injured party […] Thus, the compensation or reparation
amount normally becomes part of the injured party’s personal
assets. In the case in dispute, the plaintiff, displaying a high
sense of social solidarity, does not seek individual
compensation but rather the performance of basic
infrastructure projects for the benefit of the community. […]
These projects would obviously not become part of the assets
of the Improvement Committee for the Delfina Torres viuda
de Concha neighborhood (Propicia 1), but would instead
become public property and be organized and managed by
State agencies and State-owned enterprises, pursuant to article
626 of the Civil Code. Thus, the defendants, which are State-
owned enterprises, would not pay any compensation but would
instead perform a fundamental State duty: providing the
inhabitants of a certain area (seriously affected by hydrocarbon
activities) with essential services aimed at protecting life,
health, education and a healthy environment, all of which are
basic human rights, as enshrined in article 23, items 1, 2, 7, 20
and 22 of the Ecuadorian Constitution, in correlation with
Chapter Four, sections five (vulnerable groups) and eight
(education), and Chapter Five, section two (environment), of
the Constitution.
57. The judgment affirms Ecuadorian civil liability arising from hazardous
activities, in respect of which there is a presumption of (or substitution for) the
existence of fault. The unlawful act underlying the judgment is expressly linked to
defendant’s deprivation of Ecuadorian citizens’ right to live in a healthy
environment, enshrined in article 23, item 22 of the Constitution as in force since
1983.
58. In sum, Chevron’s contention that the Provincial Court of Sucumbíos applied
the EMA retroactively is wholly unsupported and incorrect as a matter of law.
Ecuadorian law allows a judge to amplify or clarify his/her decisions at the request
of one of the parties
59. Articles 281 and 282 of CPC 2005 provide as follows:69
Article 281. The judge who rendered judgment may under no
circumstances revoke it or alter the meaning thereof, but may
clarify or amplify such judgment if requested to do so by any
of the parties within three days.
Article 282. A judgment shall be clarified if obscure and be
amplified when any of the points in dispute have not been
69
RLA-198, Code of Civil Procedure, Arts. 281 and 282.

20
resolved or if no decision was rendered on civil fruits, interest
or court costs and legal expenses. For purposes of such
clarification or amplification, the other party shall be heard
first. (Emphasis added)
60. Clarification by the same Judge who rendered the challenged judgment is
appropriate as a procedural remedy to any obscure, ambiguous, or contradictory
terms in the judgment in question. For judgment clarification to be appropriate, the
language must be sufficiently unclear as to prevent a full understanding of and,
consequently, proper enforcement of the judgment in the judge’s view. The purpose
of clarification is to shed light on any obscure or ambiguous portion of a decision.70
61. Under Ecuadorian law, the period for filing a request for clarification is three
days from the date of notice of the challenged judgment. Clarification may be
requested in respect of not only a judgment but any of the judge’s writs and decrees.
62. The National Court of Justice rules very succinctly on requests for
clarification and amplification by the parties, usually denying them.71
Almost by way
of a model, this practice is very often followed by lower courts and judges.
Assessment of evidence under Ecuadorian law
Rule of validity and effectiveness of evidence
63. Article 121 of the CPC (1987), in effect when the Lago Agrio complaint was
filed, provided the following “due process” guarantee with respect to the court’s
acceptance of documents or testimony into evidence: “[o]nly properly produced
evidence, i.e., evidence requested, presented and examined according to legal
requirements, is admissible in court.”72
This guarantee was also enshrined in the
Constitution in force at the time73
and in our current Constitution.74
For purposes of
the request for and/or submission of evidence and the provisions for the taking of
evidence, article 123 CPC 1987 provides that “[t]he judge shall, within the relevant
period, order that all evidence presented or requested within the same period be
examined after the opposing party has been notified.”75
70
In the words of J. FLOR, “a Judge is only required to consent to a request for clarification or
amplification when, in his/her view, the judgment is reasonably open to doubt.” Ex. 29, J. FLOR
RUBIANES, Teoría General de los Recursos Procesales, segunda edición, corporación de estudios y
publicaciones, Quito, 2003.
71
See, for example, Ex. 30, National Court of Justice. Division for Labor and Social Matters.
Cassation case file 33. Summary oral proceedings No. 33-2008, styled Raúl Carreño Sisalima v. Banco de
Machala S. A. Official Gazette, Supplement 88, November 19, 2010.
72
Ex. 4, Code of Civil Procedure 1987, Art. 121.
73
C-079, 1998 Constitution of Ecuador, Art. 24, item 14 (““Evidence obtained or produced in
violation of the Constitution or the law shall have no validity.”).
74
C-288, 2008 Constitution of Ecuador, Art. 76, item 4 (“Evidence obtained or produced in violation
of the Constitution or the law shall have no validity or probative effectiveness”.).
75

21
64. With regard to examining the evidence requested and ordered within the
relevant evidentiary period, the general rule, as provided in article 319 CPC 1987, is
that evidence must be examined within the relevant evidentiary period, unless
otherwise authorized by law.76
In this context, “[t]he judge must indicate time frames
when not specifically indicated by law,”77
as required under article 322 CPC 1987,
without detriment to the judge’s ex-officio authority to order the production of any
evidence he deems necessary to elucidate the case at any stage of the proceedings, as
provided in article 122 CPC 1987.78
65. In this context, with respect to the Lago Agrio case, it is worth noting that:
 Documentary evidence added to the case file without having been
presented during the evidentiary period of the proceedings have no
probative value or effectiveness.
 Documentary evidence obtained without a prior court order to enter
them as a specific party’s evidence within the relevant evidentiary
period have no probative value or effectiveness.
 Documentary evidence entered in the case file by any of the parties
without previously notifying the opposing party, have no probative
value or effectiveness.
66. All of these basic rules show that any document or instrument which the
parties may have wished to add to the case file following 29 October 2003, the close
of the evidentiary period, without a court order and without notifying the opposing
party, is deemed nonexistent and may not be considered by the judge for purposes of
the proceedings. This does not mean that all other proceedings in the case then
become null and void or ineffective; instead, it merely removes from evidence
documents and instruments submitted by a party in violation of constitutional or legal
requirements concerning production of admissible evidence.
67. Article 278 CPC 1987 and article 274 CPC 200579
require the judge to base
his judgments only on the law –failing which, on the principles of universal justice-
and on the merits of the proceeding, understood as lawfully proven allegations and
76
Ex. 4, Code of Civil Procedure 1987, Art. 319 (“The evidence must be submitted and practiced
within the respective terms of discovery, except where expressly authorized by law.”)
77
78
Ex. 4, Code of Civil Procedure 1987, Art. 122 (“Judges can order the evidence they deem necessary
ex officio to clarify the truth, at any stage of the proceedings, before issuing the judgment. The examination
of witnesses is excepted, which cannot be ordered ex officio, but the judge may ask again or request
explanations from witnesses who have already legally declared.”)
79
Ex. 4, Code of Civil Procedure 1987, Art. 278 (“The judgments and the orders shall clearly decide
the points that are subject to resolution, based on the law and on the merits of the case, and in the absence of
law, on the principles of universal justice.”); see also, C-260, Code of Civil Procedure 2005, Art. 274
(“Judgments and orders must decide with clarity the issues that are the subject thereof, relying on the law and
the merits of the case; if there is no law, they must be based on binding precedents of case law and principles
of universal justice.”)

22
facts.80
Nothing foreign to the proceedings may be taken into account by the judge
when rendering judgment.
Rule of sound judgment
68. The valid and effective evidence must be weighed by the judge as a whole, in
accordance with the rules of sound judgment. The first paragraphs of articles 119
CPC 1987 and 115 CPC 2005 state:
Evidence is to be evaluated as a whole, in accordance with the
rules of sound judgment, without detriment to the formalities
required under substantive law in order for certain acts to exist
or be valid.81
69. Pursuant to judicial precedent in Ecuador, the rules of sound judgment refer
to the use of logic and the judge’s experience when evaluating evidence. In effect, the
National Court and the Supreme Court of Ecuador (“CSJ”) have repeatedly
determined that:
"[quoting Sergi Guash Fernández] By definition, all
proceedings must be logical. However, logic, while essential,
is not sufficient. Through the rules of sound judgment, the
legislature calls on the courts to weigh evidence by means of
cognitive tools that go beyond mere logic. It has been written
that the rules of sound judgment are legal standards that act as
principles of human conduct to be followed. Strictly speaking,
they are not legal rules, but the provisions that refer to them
are.... Basically, sound judgment is the use of principles of
proper human understanding, based particularly on legal logic,
equity and justice, and the scientific principles of law. Thus,
while the legislature does not impose the outcome of the
court’s assessment, it does impose the path to be followed, the
specific means, the assessment method, namely reason and
logic as components of every judgment. Thus, in making value
judgments regarding the evidence, a judge uses logical criteria
along with the rules of common experience or a specialized
80
In defining the “merits of the proceeding”, the Supreme Court of Justice has indicated: “The law
provides that a judgment must be in accordance with the law and the merits of the proceeding. In his
Diccionario Enciclopédico de Derecho Usual [Encyclopedia of Customary Law], Guillermo Cabanellas
defines the merits of the proceeding as: ‘the set of evidence, background and reasons arising from a
proceeding and forming the foundation on which the Judge or Court is to reach decisions and ultimately
render judgment, far from personal prejudices or assessments and based on that which has been argued and
proven.’” Ex. 31, Supreme Court of Justice, Second Division for Civil and Commercial Matters, Ruling [n/n]
of February 27, 2012, in case No. 62, Pérez v. Heirs of José Serrano, published in Official Gazette 589 of
June 4, 2002.
81
Ex. 4, Code of Civil Procedure 1987, Art. 119 (“The evidence must be weighed as a whole,
according to the rules of sound judgment, without prejudice to the formalities required in the substantive law
for the existence or validity of certain acts.”); see also, C-260, Code of Civil Procedure 2005, Art. 115
(“Evidence must be evaluated as a whole, in accordance with the rules of good judgment [sana crítica],
without prejudice to the solemnities prescribed by substantive law for the existence and validity of certain
acts.”)

23
branch of knowledge (such as psychology, logic, or physics),
applying them even without realizing it, even if they relate to
an area of which he or she has no specific knowledge." The
above-cited author adds: "...the rules of sound judgment have
two basic elements. On one hand, the rules of formal logic
(which in German jurisprudence form a special category
known as Denkgesetze), which are not derived from
experience but rather provide the structure for reasoning; and
on the other, the maxims of experience (psychological,
scientific, technical, etc.) with which the judicial authority is
familiar. The logical principles on which any judgment must
rest are stable and permanent; however, the maxims of
experience are contingent and variable. Consequently, the
rules of sound judgment are an instrument which in the hands
of the judge may be adjusted to suit the changing local and
temporal circumstances and the peculiarities of the specific
case in question... Ultimately, the rules of sound judgment, of
human or rational judgment, are quite simply an instrument of
reasoned evaluation, free conviction, deep conviction (despite
its historical deformation), rational persuasion, free assessment
of the evidence, or however one prefers to call it; in other
words, the freedom to weigh the evidence within rational
parameters. It is not at all an arbitrary or uncontrolled
evaluation of evidence or an assessment foreign to the
evidence, but rather a rational instrument acting to effect a
logical reconstruction of the facts. It requires rational
inference, a logical and critical look at the evidence. Otherwise
one would escape the arbitrariness of the legislature to fall into
the arbitrariness of the courts." Consequently, sound judgment
excludes arbitrary reasoning […].82
70. Under the rules of sound judgment, a judge is authorized to dismiss evidence
as unconvincing. The CSJ once indicated:
According to the principle of sound judgment in weighing
evidence, as provided in Article 119 of the Code of Civil
Procedure, a judge has the authority to dismiss a piece of
evidence as unconvincing. Sound judgment is the union of
logic and experience; it is rules of proper human
understanding. This leads to the conclusion that the Lower
Court, when rejecting the oral evidence as vague, imprecise
and referential, was simply applying the rules of sound
82
Ex. 32, Supreme Court of Justice, Division for Civil and Commercial Matters, Ruling [n/n] of
February 11, 1999, in the case styled Ordóñez v. Granja, published in the Judicial Gazette, year XCIX, series
XVI, No. 14, p 3962.

24
judgment in weighing evidence pursuant to the authority
conferred on judges by our procedural legislation […].83
71. Furthermore, although the evidence presented in a proceeding is subject to the
rules of sound judgment, a judge cannot on this basis assign value to that which has
no probative value under the law:
Our procedural legislation exhaustively determines the
evidentiary means that may be admitted in a proceeding; in
other words, the judge and the parties are not entirely free to
choose the means they will use to convince the judge as to the
disputed facts in the proceeding. Therefore, while the judge is
free to assess evidence under the guidance of his or her “sound
judgment”, he or she cannot accept ANY means of evidence
other than those provided as such in the law.84
72. A useful example for the Lago Agrio case is the rule set forth in article 203
CPC 1987 or 199 CPC 2005 regarding private documents:
Letters addressed to or by third parties, even if an obligation is
mentioned therein, shall not be admitted for examination or
serve as evidence.85
73. In reflecting on this provision, one should keep in mind that the parties in the
Lago Agrio proceeding were Chevron and a group of individuals; thus,
correspondence from or to third parties, irrespective of their participation in the
proceeding, does not constitute admissible evidence and may not be assessed by a
judge.
Right of appeal and standard of review in summary oral proceedings.
74. The Court hearing an appeal in a summary oral proceeding may only consider
evidence that has been lawfully requested, presented, ordered and produced during
the lower court proceeding. The higher-court judge is not required to rule on
extraneous elements, without detriment to the remedies available to the parties under
the law, to be exercised separately, including for compensatory purposes.
75. In fact, Chevron introduced a large number of opposing counsel documents
into the case file in support of its “fraud” allegations. However, the issues affecting
the validity and probative value of the documents entered in the case include the
following:
83
Ex. 33, Supreme Court of Justice. Division for Social and Labor Matters. Ruling [n/n] of January
25, 1995, in the case styled Arévalo v. Hidalgo, published in the Judicial Gazette, year XCV, series XVI, No.
3, p 681.
84
Ex. 34, Supreme Court of Justice. First Division for Civil and Commercial Matters. Ruling [n/n] of
February 25, 2000, in the case styled Galati v. GAPSA, published in the Judicial Gazette, year CI, series
XVII, No. 3 at 583.
85
Ex. 4, Code of Civil Procedure 1987, Art. 203; see also, RLA-198, Code of Civil Procedure 2005,
Art. 199.

25
 The documents were not requested, presented, ordered or produced as
part of the proceeding in which Chevron seeks to use them in its
behalf, as required under article 117 CPC 2005.
 The opposing party, plaintiffs Aguinda et al., was not notified of the
documents’ production in advance as required under article 119 CPC
2005.
 The public and private instruments executed outside of Ecuador and
the legislation applicable thereto are not in compliance with the
provisions of articles 188 et seq. CPC 2005, including authentication
and proof of foreign law.86
 Lastly, all such documents have been created by third parties and are
addressed to and from third parties, which entirely rules them out as
evidence under article 199 CPC 2005.87
76. In view of these circumstances and irrespective of their content –which we
are not called on to evaluate in this report–, the Court of Appeals was unable even to
consider the large number of documents submitted by Chevron. Therefore, its refusal
to consider these documents as evidence in the record before it was correct and
appropriate under Ecuadorian law.
77. Even if, arguendo, the documents provided by Chevron to support its “fraud”
allegations were lawfully-produced items required to be admitted into evidence, the
Court of Appeals still would have been legally unable to consider Chevron’s “fraud”
allegations because of the way these were raised. In a summary oral proceeding,
under no circumstances may the Court of Appeals have competence to hear and rule
on the matter if it does not form a part of the merits of the proceeding (i.e.,
allegations and evidence produced on a timely basis).
Ecuadorian Law Provides For Effective Appellate Remedies To Address Chevron’s
Allegations Of Fraud And Due Process Violations
78. Claimants thus aver that no local mechanisms are available in Ecuador to
“remedy” the specific harm which they assert that they have suffered.88
But
Claimants’ contention is incorrect as a matter of law.
79. Ecuadorian law provides for at least two effective remedies available to
Claimants to address the alleged fraud and consequent violations of due process and
other constitutional rights: (i) the cassation appeal to the National Court of Justice,
and (ii) the extraordinary action for protection before the Constitutional Court.
86
RLA-198, Code of Civil Procedure 2005, Arts. 188-190.
87
RLA-198, Code of Civil Procedure 2005, Art. 199 (“The letters addressed to third parties, or by
third parties, although referring to an obligation, shall not be accepted for recognition, nor serve as
evidence.”)
88
Claimants’ Supplemental Merits Memorial ¶ 248.

26
80. The cassation appeal is a procedural recourse where the National Court
reviews the legality of a judgment. It can be brought under any of the grounds
enshrined in Art. 3 of the Law on Cassation, as follows:89
a. Improper application, failure of application or erroneous
interpretation of [substantive] legal rules, including binding
precedents, in the judgment or order, that were determining factors
in the holding;
b. Improper application, failure of application, or erroneous
interpretation of procedural rules, when they have irreparably
invalidated the process or caused lack of a proper defense, provided
that they influenced the decision in the case and the respective
invalidity would not have been legally confirmed;
c. Improper application, failure of application, or erroneous
interpretation of the legal provisions applicable to the evaluation of
evidence, provided that they led to erroneous application or non-
application of rules of law in the judgment or order;
d. Resolution, in the judgment or order, of that which was not a subject
of the litigation or failure to resolve all the issues which were
subjects of the litigation; and
e. When the judgment or order does not meet the requirements set
forth by law, or contradictory or incompatible decisions are adopted
in the holding.
81. Claimants assert that the cassation appeal before the National Court is not an
effective remedy because it is limited to legal issues and cannot be brought on the
basis of factual matters on which either the first-instance court or the appellate court
may have erred.90
However, the violations which Chevron alleged in its cassation
appeal–and also described in Claimants’ memorials in the arbitration proceedings—91
fall squarely within each of the grounds established in Art. 3 of the Law on
Cassation.
82. In fact, the Law on Cassation provides for the review of the application of
rules on the standard of proof, and thus the National Court could find, for example,
that those rules were not applied properly by the lower court and quash the judgment
(Law on Cassation, Art. 3, (3)). Additionally, a cassation appeal can be brought for
violation of procedural rules, when they have irreparably invalidated the process or
resulted in a lack of a proper defense.92
Chevron has invoked precisely these grounds
89
C-316, Law on Cassation, Art. 3.
90
Claimants’ Supplemental Merits Memorial ¶ 249.
91
The allegations brought by Chevron before the National Court comprise nearly all of the same
issues that are mentioned by Claimants in their memorial on the merits for this arbitration.
92
Law on Cassation, Art. 3(2).

27
to support its cassation appeal.93
Specifically, Chevron argues in its appeal that the
judgment must be overturned due to the infringement of several Ecuadorian laws and
binding judicial precedents, including the Constitution, the Civil Code, the Code of
Civil Procedure, the Statute of the Administrative Legal Framework of the Executive
Branch; the Organic Code of the Judiciary, the EMA, and others.94
83. The main grounds asserted by Chevron to invalidate the Lago Agrio
proceeding and/or the judgment can be summarized as follows: i) violation of
procedural formalities (due process), and ii) violation of the right to defense. In
support, Chevron makes the following allegations:
a. Lack of jurisdiction and authority
b. Inappropriate joinder
c. Retroactive application of the law in the proceeding
d. Drafting of the judgment by a third party
e. Procedural fraud
f. Violation of procedure in relation to the nature of the case being
judged.95
84. The National Court can review Chevron’s allegations pursuant to its powers
under Article 3 of the Law of Cassation.
85. Should the National Court of Justice deny Chevron’s cassation appeal,
Chevron could file an extraordinary action for protection before the Constitutional
Court.96
This action is designed to seek redress for the damages caused by a final
judgment or order that violates a fundamental right protected by the Constitution.97
The extraordinary action for protection allows for the reparation of harm arising from
a violation of due process that infringes upon the right to defense of one of the parties
93
C-1068, Cassation Appeal at 159.
94
C-1068, Cassation Appeal at 2-3.
95
C-1068, Cassation Appeal at 3.
96
C-288, Constitution of 2008, Art. 94 (“ A special appeal for protection shall be admissible against
final judgments or orders in which rights recognized by the Constitution are violated by act or omission, and
shall be filed with the Constitutional Court. The appeal shall be admissible after regular and special remedies
have been exhausted within the legal deadline, unless failure to file those remedies is not attributable to
negligence by the holder of the constitutional right that was violated.”) Art. 437 (“Citizens may individually
or collectively file suits for protection against judgments, final rulings and decisions with the weight of
judgments. For this legal remedy to be admissible, the Court shall verify compliance with the following
conditions:
1. That judgments, rulings and decisions be final or executory.
2. That the appellant show that the judgment violates, by commission or omission, due process or
other rights recognized by the Constitution.”)
97
Ex. 23, EFECTOS JURÍDICOS DE LA ACCIÓN EXTRAORDINARIA DE PROTECCIÓN
PREVISTA EN LA CONSTITUCIÓN, José Alvear Icaza, Revista Jurídica, Universidad Católica de
Santiago de Guayaquil, en
http://www.revistajuridicaonline.com/index.php?option=com_content&task=view&id=700&Itemid=116

28
to the litigation.98
Such is Chevron’s allegation as to what transpired in the Lago
Agrio litigation.
86. Should the Constitutional Court find that a judgment violated constitutional
rights, it shall order full compensation to the appellant.99
Alleged Award of Extra Petita Damages in The Lago Agrio Judgment
87. Claimants aver that the Lago Agrio Judgment awarded damages which had
not been requested by the Plaintiffs in their complaint, thereby breaching Ecuadorian
law, specifically the principle of congruence between the prayer for relief and the
judgment.100
Having conducted a careful examination of the complaint and the Lago
Agrio Judgment, I am of the opinion that Claimants’ assertion is factually inaccurate
and finds no support in applicable law.
88. The principle of congruence in Ecuador in fact mandates that there must be a
correlation between a judgment and the relief requested in the corresponding
complaint as well as the defenses raised in the answer to the complaint (the subject
matter of the complaint or litis.)101
There is, however, no requirement that the
complaint identify the specific form of reparation that the judgment should order to
remedy the alleged harm. The complaint must only specify “the thing, quantity or
act that is requested,”102
and the judgment must order reparation that is
commensurate and consistent with the subject matter of the case in question and the
relief requested.
89. The Lago Agrio action was brought, in part, for damages arising from the
deterioration to the health and to the environment, including the biodiversity with all
its constituent elements.103
The relief requested in the Lago Agrio Complaint is
classified in two general categories: (i) “The elimination or removal of the
contaminating substances that still threaten the environment and the health of the
98
The violation of any of the rights and guarantees provided for in Art. 76 of the Ecuadorian
Constitution can be challenged by means of an extraordinary action for protection. RLA-164, Art. 76(4) and
(7).
99
Ex. 23, EFECTOS JURÍDICOS DE LA ACCIÓN EXTRAORDINARIA DE PROTECCIÓN
PREVISTA EN LA CONSTITUCIÓN, José Alvear Icaza, Revista Jurídica, Universidad Católica de
Santiago de Guayaquil, en
http://www.revistajuridicaonline.com/index.php?option=com_content&task=view&id=700&Itemid=116
100
Claimants’ Supplemental Memorial ¶¶ 41, n. 125, 42-49. The allegedly ultra petita damages are: (i)
the construction of a potable water system; (ii) funding for treatment for the persons who suffer from cancer
that can be attributed to TexPet’s operation in the Concession; and (iii) funding for a community
reconstruction and ethnic reaffirmation program.
101
C-1177, Alberto Vásconez Gavilanez vs. Manuel Tobar Mayrga, Ecuadorian Supreme Court of
Justice, First Civil and Merchant Court, Decision 246-2000, Matter 150-97, Official Gazette, Aug. 2, 2000.
102
RLA-198, Code of Civil Procedure, Art. 67.
103
C-071, Lago Agrio Complaint, Section VI.2 at 15, Prayer for Relief. This aspect of the claim is
made pursuant to the terms of Article 43 of the EMA.

29
inhabitants”, and (ii) “The remediation of the environmental harm caused, pursuant
to Section 43 of the [EMA].”104
90. With respect to the latter, the Superior Court of Sucumbíos adopted a holistic
approach and defined the notion of “environmental harm” as encompassing “every
loss, diminution, detriment, impairment, prejudice caused to or inflicted on the
environment or any of its natural or cultural components.” The court draws this broad
definition of environmental harm from a document provided by Chevron itself, and
which provides a broad definition of the “environment” as comprised not only by the
“flora and fauna and the context in which these develop”, but also by the
“institutions, the economic, political and social relationships, the culture, among
other values that interact between the human individuals and inhabitants.”105.
91. The court deemed appropriate to assess the extent of the damages “in their
complexity as a whole”, taking into account the effect that the environmental harm
can have on other rights, such as the right to health of the local inhabitants106
and the
rights of the indigenous communities whose culture and existence were directly
affected by the harm caused to their environment.107
92. It is in this context that the court awarded, inter alia, the categories of
damages that Claimants refer to as extra petita, i.e., the construction of a potable
water system, the treatment of people who suffer from cancer, and a program for
reconstruction of the community. Each of these categories is directly related to the
harm that the complaint explicitly alleges as attributable to the environmental
contamination and the resulting harm to the health of those who inhabit the
contaminated areas and the culture of the affected indigenous communities. All of
them are evidently comprised within the second of the two general categories of
damages identified in the prayer for relief of the Lago Agrio complaint.108
Piercing of the Corporate Veil Is a Remedy Available to Courts in Ecuador To
Prevent Abuse or Fraud Affecting Third Parties.
104
C-071, Lago Agrio Complaint, Sections VI.1 and VI.2 at 14-16.
105
The court adopted this definition from a document styled, “Report On Human Development 1999”
(“Informe sobre Desarrollo Humano Ecuador 1999”), which had been introduced in evidence by Chevron.
See Lago Agrio Judgment at 94.
106
See Lago Agrio judgment at 94-95.
107
See Lago Agrio judgment at 171.
108
See C-071, Lago Agrio Complaint, Section VI.2 at 15, Prayer for Relief. In fact, as part of the
second category of damages request, the complaint specifically includes a request for:
d) “The retention, at the defendant’s expense, of qualified personnel or firms to design and
implement a plan aimed at improving and monitoring the health of the inhabitants of the
towns affected by the pollution.”
The construction of a potable water system and the treatment of those who suffer from cancer
possibly attributable to the environmental contamination are two forms that the court seems to have
considered appropriate to satisfy this specific request and procure the reparation of the harm caused to the
health of the inhabitants of the communities affected by the contamination.

30
93. Claimants allege that the Lago Agrio Court violated Ecuadorian law by
piercing the corporate veil and holding Chevron liable for TexPet/Texaco’s
actions.109
Claimants’ contention is once again incorrect as a matter of law.
94. Piercing of the corporate veil is a measure available to Ecuadorian courts to
prevent cases of fraud or abuse of the corporate separateness.110
Even Dr. Coronel
Jones, Claimants’ own expert, acknowledges the existence of this mechanism in his
report.
95. In fact, while Ecuadorian law upholds the principle of separate legal
personalities (i.e., a corporation is treated as a legal person distinct from its
shareholders),111
it also recognizes the courts’ prerogative to lift the corporate veil of
a business organization when the corporation is used as a vehicle to promote abuse of
the law or to defraud, or where recognition of corporate separateness would lead to
an inequitable result.112
96. This is by no means unique to Ecuadorian law. Other Latin-American
jurisdictions, such as Argentina and Colombia,113
allow a court of law to lift the
corporate veil of a business organization to prevent abuses of the corporate
separateness.
97. Ecuadorian courts have in the past resorted to the lifting of a corporation’s
veil to prevent abuses where the corporate separateness becomes a vehicle to defraud
and affects the rights of third parties.114
Indeed, the Ecuadorian Supreme Court has
109
See Claimants’ Supplemental Merits Memorial ¶ 27-30; See also Coronel Third Expert Rpt. ¶¶ 68-
73.
110
Coronel Third Expert Rpt. ¶ 72.
111
Civil Code, Art. 1957 (“The partnership is a legal person distinct from the shareholders individually
considered.”)
112
CLA-377, Law on Companies, Art. 17 (“For acts of fraud, abuse or other improper conduct
committed on behalf of companies and other individuals or legal entities, the following shall be held
severally liable: 1. Those who order or carry them out, without prejudice to the responsibility that may affect
such persons . 2. Those who obtained benefit to the extent of its value. 3. The holders of the properties for the
purpose of their restitution.”)
113
See, for example, Ex. 37, Colombian Law No. 1258, 5 December, 2008, Art. 42 (“DISMISSAL OF
LEGAL PERSONHOOD. When the company of simplified stocks is used in fraud to the law or as to harm
third parties, the shareholders and managers that have conducted, participated in or facilitated the fraud-
inducing acts, shall be jointly and severally liable for the obligations arising from said acts and damages
caused.”) See also An. 38 Argentinean Law No. 19.550 of Commercial Companies, Art. 54
(“Unenforceability of Legal Personhood.- The action of the company concealing the achievement of
extraordinary purposes as mere means to break the law, public order or good faith or to frustrate the rights of
others, will be charged directly to the shareholders or the controlling persons who made it possible, who will
be jointly and severally liable for the damages caused.”)
114
See Ex. 35, First Civil and Commercial Chamber of the Supreme Court of Justice, File No. 120,
March 21, 2001 at 11:15 a.m., Official Registry No. 350, June 19, 2001 (Diners Club del Ecuador vs.
Mariscos de Chupadores CHUPAMAR S.A.), cited by the Lago Agrio Judgment at 14. In this case, the
Supreme Court states:
“Faced with these abuses, we must react dismissing the legal personality, i.e., piercing the
veil that separates third parties from the real end users of the results of a legal business and
get to them, in order to prevent that the corporate structure of is used incorrectly as a
mechanism to harm others, either creditors who are impeded or prevented to achieve

31
asserted that it is not only a Court’s power but also its duty to lift the corporate veil
when faced with abuses of the corporate form.115
98. Consistent with this practice, the Superior Court of Sucumbíos
acknowledged in the Lago Agrio judgment that the piercing of the Corporate veil is
in fact an exceptional measure,116
justified in this case by evidence of an apparent
lack of administrative and financial independence of TexPet and Texaco.117
99. According to Ecuador’s Law of Companies, piercing the corporate veil is
only applied as a sanction to impute liabilities of the corporation whose corporate
separateness is being disregarded to its shareholder/s.118
This measure is not
intended to benefit the shareholders in any way, or to place them in the shoes of the
disregarded company. In this case, the piercing of TexPet’s corporate veil does not
allow – let alone require — the Court to simultaneously find that Chevron
automatically assumed the defenses that may have been available to TexPet.
Alleged Refusal to Hold Hearings To Address Purported
Essential Errors in Expert Reports
100.Claimants aver that the Court departed from established procedure by
refusing either to (i) rule on Chevron’s challenges to the report filed by court-
appointed expert Richard Cabrera, or (ii) grant Chevron’s numerous motions to hold
a hearing on essential-error petitions.119
Claimants’ contention finds no basis in
Ecuadorian rules of procedure.
101.Where an expert report is alleged to contain an “essential error,” the CPC
prescribes that the Court must –either sua sponte or on motion of a party— provide
for the correction of such error by another expert.120
Neither the CPC nor Ecuadorian
jurisprudence shed light on the meaning of “essential error” or provide examples of
what could constitute “essential error.” The existence of “essential error” must be
proven “summarily”.121
Chevron filed no less than twenty six (26) allegations of
compliance with their credits, or legitimate owners of an asset or a right to deprive or take
it away from them.”
See also Ex. 36, First Civil and Commercial Chamber of the Supreme Court of Justice, File
No. 20-03, Jan. 28, 2003 (Angel Puma vs. Importadora Terreros Serrano Cía. Ltda.).
115
See Ex. 36, First Civil and Commercial Chamber of the Supreme Court of Justice, File No.
20-03, Jan. 28, 2003 (Angel Puma vs. Importadora Terreros Serrano Cía. Ltda.).
116
See Lago Agrio judgment at 14, citing First Civil and Commercial Chamber of the Supreme Court
of Justice, File No. 393, July 8, 1999, Official Registry No. 273, Sept. 9, 1999.
117
See Lago Agrio judgment at 14 et seq.
118
CLA-377, Law on Companies, Art. 17.
119
See Claimants’ Supplemental Memorial, ¶ 202.
120
See RLA-198, Code of Civil Procedure, Art. 258 (“If the expert report were vitiated by an essential
error, proven summarily, the judge shall, upon request of a party or on its own motion, order it to be
corrected by another or other experts, without prejudice to the liability that the [expert] may have incurred by
fraud or bad faith.”) See also, id., Art. 259 (“In case of disagreement in the expert reports, the judge, if
deemed necessary to form its opinion, may appoint another expert.”)
121
Id.

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