Hess Corp. won its arbitration battle with Exxon Mobil Corp., clearing the way for it to be bought by Chevron Corp. more than 20 months after the $53 billion deal was announced.

The decision is a major victory for Chevron, ending a period of strategic limbo that hurt its stock and prompted questions over the quality of the company’s due diligence when it agreed to buy Hess in October 2023. Chevron Chief Executive Officer Mike Wirth said he would walk away from the deal if they lost the case.

A representative for Exxon confirmed Hess and Chevron prevailed, and the company said in a statement that “we disagree with the ICC panel’s interpretation but respect the arbitration and dispute resolution process.”

Chevron and Hess didn’t immediately respond to requests for comment.

Hess shares surged as much as 7.7% before the start of regular trading. Chevron rose 3.4%.

The clash between North America’s biggest energy producers was unprecedented in the modern history of Big Oil, an industry in which companies routinely partner with each other to minimize project risk and share costs. Exxon, which operates and owns 45% of Guyana’s offshore Stabroek Block, claimed it had a right of first refusal over the disposition of Hess’s 30% stake.

Hess and Chevron, however, argued the right didn’t apply because their deal was structured as a corporate merger rather than an asset sale.

The uncertainty surrounding the deal has been a “material contributor” to the underperformance of Chevron’s stock price compared to its rivals, Wirth said in November.

Both sides had expressed extreme confidence in their opposing positions on the wording of the Guyana contract, which was written more than 15 years ago.

“We wrote these documents — we understood the intent of those documents,” Exxon Chief Executive Officer Darren Woods said in December. “That gives us a lot of confidence in the position that we’ve taken.”

Wirth and John Hess consistently backed their legal advice throughout the process.

The deal’s expected completion is a win for arbitrage traders who were betting on the spread between Hess’s share price and the exchange ratio agreed with Chevron.

Hedge funds including Millennium Management, Pentwater Capital Management and HBK Investments LP had staked billions of dollars on the deal closing, according to data compiled by Bloomberg.