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(Adds byline, background on dispute, statement from Chevron)
By Joseph Ax
NEW YORK, Aug 4 (Reuters) - A U.S. appeals court on Tuesday rejected Ecuador's challenge to a $96 million international arbitration award in favor of energy giant Chevron Corp, marking the latest twist in a decades-long dispute over the development of oil fields in the South American country.
The dispute stemmed from a 1973 deal that called for Texaco Petroleum Co, later acquired by Chevron, to develop oil fields in exchange for selling oil to the Ecuadorean government at below-market rates. Texaco filed several lawsuits in the 1990s accusing Ecuador of violating the contract.
The District of Columbia U.S. Circuit Court of Appeals upheld a 2011 award from The Hague's Permanent Court of Arbitration in the Netherlands.
Calls for comment to a lawyer for Ecuador and the Ecuadorean embassy in Washington were not immediately returned.
The decision is not part of a separate legal battle brought by a group of Ecuadorean villagers who claim Texaco caused billions of dollars in pollution damage when it began exploring oil deposits in the 1960s.
In the case at hand, Chevron initiated an arbitration proceeding at The Hague in 2006, claiming the Ecuadorean courts failed to resolve the lawsuits in a timely manner, violating a treaty between Ecuador and the United States. A panel awarded Chevron $96 million, which was subsequently upheld by the Dutch court system.
Chevron then filed a federal lawsuit in Washington, seeking a judgment confirming the panel's decision in order to collect the award. After a federal judge affirmed the award in 2013, Ecuador appealed to the D.C. Circuit.
"In signing the (treaty), Ecuador agreed to arbitration of precisely this type of action," Circuit Judge Robert Wilkins wrote on Tuesday for a three-judge panel.
In a statement, a Chevron spokesman said the company was "pleased" and pegged the award at $106 million, including interest.
Chevron continues to fight claims from the Ecuadorean villagers, who have filed lawsuits in Canada, Brazil and Argentina seeking to enforce a $9 billion judgment rendered in Ecuador against Chevron.
In March 2014, a U.S. judge in New York issued a scathing ruling finding that the villagers' American lawyer, Steven Donziger, committed fraud in securing that judgment.
Donziger, who denies any wrongdoing, has appealed. But Chevron has sought to use the New York decision to defend against the lawsuits in Canada, Brazil and Argentina. It has also initiated a separate arbitration proceeding in The Hague, claiming it was denied justice in Ecuador. (Reporting by Joseph Ax; Editing by Meredith Mazzilli and Bill Rigby)