NEW YORK DISTRICT COURT COMPELS ARBITRATION OF CLAIMS BY OUTRIDER MANAGEMENT AGAINST ARGENTEM CREEK
A federal judge in New York on February 10 granted the Argentem parties motion to compel arbitration against plaintiff Outrider thereby dismissing them from Kazakhstan’s vexatious litigation against U.S. investors. The claim was part of Kazakhstan’s efforts to enlist Outrider in its efforts to obstruct payment of a $540m final, binding and non-appealable Energy Charter Treaty Award, relating to its illegal expropriation of oil & gas assets in 2010. The Court also granted the motion by Kazakhstan to remand the case to New York State Court where Argentem’s motion to dismiss Kazakhstan’s claims will be decided. After specifically noting the number of times the award has been confirmed despite Kazakhstan’s fraud allegations, including in the United States and Sweden, the Court held that Argentem “can raise any motion to dismiss Kazakhstan’s claims in the state court.
The claim was part of Kazakhstan’s efforts to obstruct payment of a $540m final, binding and non-appealable Energy Charter Treaty Award, relating to its illegal expropriation of oil & gas assets in 2010.
Outrider, on behalf of a fund that it manages, had previously signed a Sharing Agreement in 2012 as part of its investment in Tristan bonds by which approximately 70% of the Award would be paid to bondholders, including Argentem Creek and Outrider. Outrider sold its bonds several years ago.
After removing the case to NY federal court, lawyers for Argentem Creek subsequently filed a motion to compel Outrider into arbitration based upon a clear arbitration provision in that Sharing Agreement.
Daniel Chapman, CEO of Argentem Creek Partners, commented:
“In this case, Kazakhstan is effectively weaponizing the American judicial system to victimize and harass American investors. This strategy of endless litigation, menacing statements and disinformation campaigns doesn’t change the truth – Tristan Oil’s assets were expropriated and the Swedish and US courts have previously confirmed this. Italy’s Supreme Court confirmed the same, just last week. President Tokayev is reforming the way in which Kazakhstan operates. We welcome this development along with his removal of many of the bad actors responsible for unlawful expropriation and mistreatment of investors from the past.”
Since December 2013, Kazakhstan has refused to pay the Swedish arbitral 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. It has been upheld in both the Svea Appeals Court and the Swedish Supreme Court – making the Award final, binding and non-appealable.
Kazakhstan’s refusal to honor the Award has led to the freezing of Kazakhstani state assets worth a total of US$5.8 billion worldwide.
View the ruling here.
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