$90 million Kazakh asset freeze upheld by Swedish Supreme Court

The Swedish Supreme Court today upheld a $90 million freeze on Kazakhstan National Fund’s assets in Sweden, marking a significant defeat for Kazakhstan in the long running “Tristangate” dispute.

The court ruled that the seized assets representing part of Kazakh National Fund are not protected by sovereign immunity as a matter of international and Swedish law.

Paul Butler, partner at Akin Gump and counsel to Argentem Creek Partners commented: “Today’s ruling is an important step forward in the enforcement proceedings, which brings investors closer to getting compensated for the illegal expropriation of the assets of Tristan Oil by Kazakhstan.”

The Swedish Supreme Court remanded the case to the Svea Court of Appeal for further consideration with respect to other outstanding questions.

Reacting to the 16 November 2021 Brussels Court of Appeal decision upholding the challenge brought by Kazakhstan against the enforcement of the $544 million Energy Charter Treaty Award in Belgium, Paul Butler stated:

“The ruling is limited to the Belgian jurisdiction only and does not at all affect the validity of the award in Sweden where it was issued and subsequently upheld twice by the Swedish Supreme Court. Nor does it affect the status of the award in those jurisdictions where it has been recognized, including in the U.S., Italy, Luxembourg, and the Netherlands. The award was the direct result of the expropriation of the Statis’ assets after the Arbitral Tribunal found a campaign of harassment and intimidation by the Republic of Kazakhstan against the Statis. The bondholders who were merely financial creditors of Tristan Oil are yet to be compensated as required under international law.”

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

A group of bondholders, including Argentem Creek, is due to receive 70% of the award proceeds under a sharing agreement with the claimants. Kazakhstan’s refusal to honor the Award has led to the freezing of Kazakhstani assets worth a total of US$5.8 billion worldwide.

View the ruling here.

To read more about the Kazakh authorities’ coordinated harassment campaign of a foreign investor and its companies, visit the Tristangate timeline.

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