CHEVRON'S ARBITRATION ORDERED STAYED BY BANGLADESHI COURT

UNCLAS DHAKA 001219 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ETRD EPET PREL BTIO BG SUBJECT: CHEVRON'S ARBITRATION ORDERED STAYED BY BANGLADESHI COURT ¶1. SUMMARY. Chevron Bangladesh, a wholly-owned subsidiary of Chevron USA, was recently ordered by a local court in Bangladesh to halt international arbitration against the GOB stemming from a gas pipeline dispute with Petrobangla, a GOB corporation charged with oil, gas & minerals exploration and development. Chevron Bangladesh has been in contact with the Embassy regarding this matter, and a meeting between Steve Wilson, Chevron Bangladesh's President and the CDA a.i. is scheduled for Monday, July 30. END SUMMARY. ¶2. FACTS OF THE CASE. Chevron Bangladesh and Petrobangla entered into a contract which included provisions for dispute resolution through The International Centre for Settlement of Investment Disputes (ICSID). Petrobangla began charging Chevron a four-percent tariff on gas moved through their pipelines, despite arguments from Chevron that Petrobangla has already purchased the gas and it is no longer Chevron's liability. NOTE: Chevron does NOT/NOT request assistance regarding arguing the facts of the case. They are only concerned with the forum in which it is heard. END NOTE. ¶3. THE ARBITRATION. Chevron instituted ICSID Case: ARB/06/10 to arbitrate the matter, naming the Government of Bangladesh as the defendant; ICSID accepted the matter for arbitration, and has formed a tribunal. Petrobangla instituted "Title Suit No 140 of 2007" in a Bangladesh court, including a request to stay the arbitration. ICSID communicated with the Bangladeshi court, requesting that it allow the arbitration to proceed. Media reports that the Bangladeshi court issued an order July 22, 2007 to Chevron effectively staying the arbitration and threatening fines if it is disobeyed. ¶4. NEXT STEPS. Chevron Bangladesh President Steve Wilson will be meeting with the CDA a.i. and Econoff on Monday, July 30 at 1300 to discuss this matter. Post will report any substantive content of that meeting septel. PASI