Ecuador’s government said Tuesday that it would pay the USD $374 million award granted to French oil company Perenco, following the country’s failure to have an arbitral award granted against it annulled.

In 2008, Perenco had sued the Ecuadorian government over a new law implemented by then-president Rafael Correa at a time of surging oil prices. The law had reserved up to 99 percent of income from crude sales in excess of a certain level for state coffers. Perenco had claimed that the law breached Ecuador’s international obligations under the France-Ecuador Bilateral investment treaty, which obliges both countries to protect the investments of nationals of the other state.

In 2019, an arbitral tribunal under the aegis of the International Centre for Settlement of Investment Disputes (ICSID) had agreed with Perenco and had ordered the Ecuadorian state to pay the company more than $450 million in damages for the prejudice caused by the promulgation of the law. Ecuador had appealed the decision to the Annulment committee of the ICSID, which rejected Ecuador’s application to completely annul the award, and instead reduced the damages awarded from $450 million to around $412 million.

In a communique, the Solicitor General’s office of Ecuador said that the ruling by the annulment committee was definitive and that it was not appealing the decision. It also stated that the Ecuadorian state would resume talks with Perenco in order to reach an agreement on the form of payment.

The current case is similar to Ecuador’s settlement with the US oil company ConocoPhillips after the latter had been awarded $380 million by another arbitral tribunal of ICSID.