On Tuesday, 13 June 2023, the Appellate Division of the Supreme Court of New York unanimously upheld the Court’s previous dismissal of a series of false claims brought by the Republic of Kazakhstan against Argentem Creek Partners (ACP) and its CEO, Daniel Chapman.

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 Partners, 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.

As part of these efforts, in June 2020 Kazakhstan filed a lawsuit in the United States against Daniel Chapman and ACP, alleging that ACP’s financing of attempts to enforce the Award amounted to being complicit in fraudulent schemes.

In August 2022, the New York Supreme Court dismissed those false allegations as an “impermissible collateral attack of a confirmed arbitration Award.” That Court rejected the Republic of Kazakhstan’s complaint  on the grounds that the alleged fraud has previously been conclusively litigated in multiple jurisdictions, including the U.S. District Court for the District of Columbia. Republic of Kazakhstan duly appealed again, leading to the final dismissal of their claims this week by the Appellate Division.  The Appellate Division explained that the evidence related in all respects to the same fraud claim Kazakhstan has been pursuing around the world for over a decade. The Appellate Division further held that even if the collateral estoppel doctrine did not foreclose all of Kazakhstan, the claims still fail as a matter of law.

Commenting, Daniel Chapman, CEO of Argentem Creek Partners said:

This ruling must now put a definitive end to Kazakhstan’s ill-advised attempts to weaponize U.S. and European courts against foreign investors. It is time for the kleptocratic ‘old guard’ to step aside and allow President Tokayev to showcase his commitment to reform by honoring international treaty obligations, paying the Tristan Award and turning the page on this ugly saga.”

In January 2023, the Svea Court of Appeal in Sweden ruled that approximately $75m of cash held in a Swedish bank on behalf of the National Bank of Kazakhstan belongs to the Republic of Kazakhstan and may be collected by the owners of Tristan Oil. The decision opened the way for investors in Tristan Oil to collect a portion of the Award proceeds for the first time.

Daniel Chapman and Argentem Creek Partners were represented by Stephen M. Baldini and Paul W. Butler of Akin Gump Strauss Hauer & Feld LLP and Clay J. Pierce of Faegre Drinker Biddle & Reath LLP.

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