Silver figure of Justice holding scales and a sword against an open law book


The Supreme Court of the State of New York has granted a motion to dismiss a lawsuit filed by the Republic of Kazakhstan against Daniel Chapman and New York-based investment firm Argentem Creek Partners.

In December 2013, a Swedish arbitral tribunal awarded the owners of Tristan Oil approximately $500m in compensation for a harassment campaign and illegal expropriation of assets by Kazakhstan’s authorities in 2010.

The Award has since been recognized in multiple jurisdictions, including the U.S., Sweden, Luxembourg, Italy and France. A group of bondholders, including Argentem Creek, is due to receive 70% of the Award proceeds under a sharing agreement with the claimants.

Since December 2013, Kazakhstan has refused to pay and instead adopted a multijurisdictional legal strategy designed to frustrate the Award and avoid compliance with its binding international treaty obligations.

As part of these efforts, in June 2020 Kazakhstan filed a lawsuit in the United States against Daniel Chapman and Argentem Creek Partners, alleging that Argentem Creek Partners’ financing of attempts to enforce the Award constituted fraud. On August 29 2022, Judge Andrew Borrok of the Supreme Court State of New York granted a motion to dismiss this lawsuit.

Judge Borrok described Kazakhstan’s main argument as “an impermissible collateral attack of a confirmed arbitration Award,” adding that “there can be no action for aiding and abetting fraud without an underlying fraud.”

The ruling states that the arbitration Award was obtained in Sweden and that the Award could only be set aside by a Swedish court, noting also that a US court had recognised the Award and that those findings were “entitled to full faith and credit.”

“Arguments that the Award were obtained by fraud were indeed considered and rejected by the court in Sweden,” Judge Borrok added.

The ruling stated that the November 2021 decision of a court in Belgium to uphold an appeal against the Award was also “wholly irrelevant”.

Kazakhstan also made further arguments which were described by the judge as “unavailing.”

Dan Chapman, CEO of Argentem Creek Partners, said:

“This is an important victory against the instigators and accomplices of this outrageous strategy who sought to weaponize American and European courts through false allegations and intimidation, hoping to obstruct payment of a final binding and non-appealable Award. Those particular officials who have led this failed strategy should stand aside and let pro-investment and pro-reform voices in Kazakhstan move this situation towards a rational conclusion.”

Paul Butler, Partner at Akin Gump, said:

“Needless to say we are very pleased that after hundreds of pages of briefing on the matter, the Court has completely dismissed Kazakhstan’s complaint against Argentem and Mr. Chapman and found, as we have argued all along, that their unfounded claims of derivative fraud were merely an unlawful collateral attack on a validly confirmed arbitration award that Kazakhstan has steadfastly refused to pay.  We hope this will end Kazakhstan’s ill-advised attempts to use US courts to intimidate investors from protecting their fiduciary interests in an award that the Court found was entitled to the full faith and credit of US law.”

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