On September 26, 2025, the Ecuadorian State achieved a landmark victory in an investment arbitration filed by the U.S. company Lynton Trading Ltd. before the Permanent Court of Arbitration (PCA).
The claim, submitted under the Bilateral Investment Treaty (BIT) between Ecuador and the United States, sought compensation of USD 214 million plus interest for alleged damages resulting from regulatory measures related to the prohibition of gambling in the country.
The State’s Defense: A Collaborative Effort
The Office of the Attorney General of the State, representing Ecuador, led the defense strategy with the support of Winston & Strawn LLP (Paris) and Lauden Consulting Americas.
The Lauden team was led by Francisco Xavier Paredes, Ph.D., an attorney whose practice focuses on international law, investment, international arbitration, dispute resolution, constitutional protection actions, and public contracts.
The defense centered on strong jurisdictional objections, demonstrating that Lynton Trading did not conduct genuine economic activities within U.S. territory. This allowed the invocation of the denial of benefits clause established in the BIT, interpreted in light of public international law and Nevada corporate law (U.S.).
The Arbitral Award: A Victory for Ecuador
The arbitral tribunal upheld the defense’s arguments and concluded that it lacked jurisdiction to hear the dispute, as it did not involve an investment protected under the treaty.
This outcome not only marks the definitive termination of the process but also represents:
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A savings of over USD 200 million for the State.
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An order for the claimant to reimburse Ecuador 80% of arbitration costs, amounting to USD 1.4 million.
Lauden’s Commitment
For Lauden, being part of this process reaffirms our commitment to:
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The defense of national interests.
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The practice of solid, ethical, and strategic international law.
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The building of trust through tangible results.
This case stands as a clear example of the value generated through cooperation between the public sector and specialized legal teams in protecting the assets of all Ecuadorians.