Kazakhstan Suffers Double Defeat in Struggle to Avoid Payment of Tristangate Award

The Brussels Court of Appeal has rejected Kazakhstan’s challenge to a $530 million attachment of assets held via its National Fund with BNY Mellon in Brussels.

The asset attachment, originally at a value of $22.6 billion, is an enforcement measure against Kazakhstan’s continued failure to pay more than $500 million awarded to the Stati Parties by a Swedish arbitral tribunal in 2013.

The Stati Parties later agreed to limit the attachment to $530 million, reflecting the approximate value of the Energy Charter Award at the time. The attachment value has since grown with interest to over $540 million.

This defeat follows the recent blow to the National Bank of Kazakhstan (NBK) last week as its claim for $118 million in damages from the Stati Parties was also rejected by a Dutch court.

NBK argued that it suffered severe losses as a result of the $22.6 billion attachment.

Stephen Baldini, partner at Akin Gump and counsel to Argentem Creek Partners commented:

“Kazakhstan is running out of options to avoid payment of the Tristangate Award. The financial costs and reputational damage to Kazakhstan continue to grow as this battle is prolonged. We expect Kazakhstan to put an end to this already lost fight and honour its obligations under international law.”

Since 2013, Kazakhstan has refused to pay the final and binding Award to Tristan Oil’s owners in compensation for the country’s harassment campaign and illegal expropriation of assets. The Award has since been recognized in multiple jurisdictions including the U.S., Sweden, Luxembourg, Belgium, Italy, France and the Netherlands.

The Brussels judge noted the existence of a “certain definite and due claim in favour of the Statis against Kazakhstan.”

The judgement also noted that Bank of New York Mellon “feared being involved in … attempts to withdraw assets from the creditors’ right of action,” and that Kazakhstan’s involvement in these attempts to escape attachment had been evidenced during a cross-examination of the Deputy Governor of NBK, which had previously taken place in England.

Read the ruling here.