© Reuters. FILE PHOTO: The Cotopaxi volcano is seen near Quito, Ecuador, on August 10, 2015.REUTERS/Guillermo Granja/File Photo
Authors: Rowena Edwards and Karin Stroheke
LONDON (Reuters) – Luxembourg bailiffs have ordered banks to freeze Ecuadorian assets held in Luxembourg accounts as Anglo-French oil firm Perenco said it still remains unpaid over a dispute over a $391 million settlement ruling, a document seen by Reuters showed.
The Ecuadorian government has committed to repay in June 2021 a debt awarded to Perenco by the World Bank’s International Centre for Investment Disputes (ICSID), which ruled that Ecuador had unlawfully terminated a production sharing agreement with the company.
Ecuador’s attorney general said last year that the government had contacted Perenco to negotiate a payment plan due to financial constraints.
“Perenco has so far, more than a year later, has not received a dollar from Ecuador,” Perenco said in a statement on Monday, adding that it would “take steps to enforce enforcement against Ecuador in Luxembourg and other jurisdictions.” its right to pay.”
Ecuador’s economy and energy ministries were not immediately available for comment. Ecuadorian U.S. counsel and global law firm Hogan Lovells declined to comment.
A spokesman for Cleary Gottlieb Steen & Hamilton LLP’s London office, legal counsel to Ecuadorian Eurobond dealer managers, did not immediately respond to a request for comment.
Perenco now has eight days to initiate court proceedings to verify the attachment, and Ecuador has 50 days to instruct a law firm to represent them in Luxembourg, said Fabio Trevisan, partner and head of the BSP dispute resolution practice at Perenco’s law firm.
Luxembourg bailiffs Pierre Biel & Geoffrey Galle ordered 122 banking entities operating in Luxembourg on July 28 to freeze assets in accounts used by Ecuador on behalf of Perenco, according to a document seen by Reuters.
A spokesman for Euroclear Clearstream confirmed that Luxembourg-based Clearstream Banking SA had been notified by the bailiffs, but declined to provide further details.
A bailiff employee declined to comment when contacted by Reuters because they were not authorized to speak to parties not involved in the case.
Reuters could not immediately determine what assets Ecuador held in Luxembourg accounts.named banks include Deutsche Bank (ETR:), Credit Suisse and HSBC.
Credit Suisse and Deutsche Bank declined to comment, and HSBC did not immediately respond to requests for comment.
Two years ago, the Latin American country defaulted on $17.4 billion in foreign debt as it suffered one of the worst coronavirus outbreaks in the region after years of economic stagnation.
As part of a subsequent debt restructuring, Ecuador sold new bonds due in 2030, 2035 and 2040, listed on the Luxembourg Stock Exchange.
Interest payments on many of those bonds are due on July 31, people familiar with the matter said. Some bondholders have received interest payments on securities that were due July 31.
Holders of Ecuador’s international bonds include major asset managers such as BlackRock (NYSE: ), Pacific Investment Management and JPMorgan Chase (NYSE: ), according to data provided by EMAXX, which provided details of the fund’s holdings based on public disclosures. information. PIMCO declined to comment, while BlackRock and JPMorgan were not immediately available for comment.
The case that led to the ICSID ruling stemmed from a 2007 decree by then-President Rafael Correa that raised the Ecuadorian state’s revenue above a certain level from the sale of oil produced by private companies.
Perenco sued Ecuador in 2008 and finally received $412 million in damages last May. Perenco is entitled to $391 million, including compensation required to pay Ecuador for environmental damage caused by Blocks 7 and 21.
President Guillermo Lasso, a conservative former banker who took office in May 2021, has pledged to revive the Ecuadorian economy and attract investment, especially in the oil and mining sectors.
“Perenco remains hopeful that the Ecuadorian government will finally meet its international obligations, demonstrate its commitment to the rule of law, and honor its commitments to foreign investors by honoring the award immediately,” the company said in a statement.