Ecuador to Appeal UK Court's Oxy Ruling
Ecuador's government will contest a UK appeals court ruling in favor of US oil company Occidental (NYSE: OXY) that would oblige Ecuador to refund the company US$75mn of value added tax (VAT), the South American country's attorney general said in a statement.
Ecuador in 2004 filed an appeal after an international arbitration panel ruled in favor of Oxy over the VAT refund. The US company claimed it was entitled to a 12% VAT rebate on crude exports that were withheld by Ecuador through December 31, 2003.
In May 2006, Ecuador took over block 15 from Oxy, for which the company filed a claim with the International Center for Settlement of Investment Disputes.
The rebate was introduced to help promote exports, but the comptroller's office claimed the rebate was designed to encourage local manufacturing, disqualifying foreign oil firms because they do not process the crude.
The attorney general said it will file a new appeal before the UK's house of lords with the aim of obtaining a "definitive and just" decision. A decision could be issued in early October, the statement said.
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