The Supreme Court of Italy yesterday rejected an appeal brought by the Republic of Kazakhstan against recognition of the $544 million “Tristangate” Award on the grounds that it was procured by ‘fraud’.

The Supreme Court of Italy upheld the earlier judgment of the Rome Court of Appeal handed down in February 2019.

Kazakhstan had argued in Italy and elsewhere that the Swedish arbitration panel making the original Award and subsequent appeals heard by Swedish judges had not considered its fraud allegations.

However, the Italian Supreme Court confirmed the appeal court’s finding that this was not the case and that “it appears ex actis that both the Stockholm Court of Appeal and the Swedish Supreme Court were aware of the appeal against the Award for reasons that substantially resemble those that have now been brought before the Court.”

A group of bondholders, including Argentem Creek, is due to receive approximately 70% of the Award proceeds under a sharing agreement with the Award creditors.

Daniel Chapman, CEO of Argentem Creek Partners, commented:

“Even at the height of the recent unrest, President Tokayev was emphasizing the importance of and need for foreign direct investment into Kazakhstan. The new government respecting its obligations under international law will reassure foreign investors Kazakhstan is now a safer place to do business.”

Since December 2013, Kazakhstan has refused to pay the 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.

Kazakhstan’s refusal to honor the Tristangate Award has led to the freezing of Kazakhstani state assets worth a total of US$5.8 billion worldwide.

Yesterday’s Supreme Court ruling opens up the possibility for the attachment in Italy of additional assets.

View the ruling here.

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