10 YEARS SINCE KAZAKHSTAN ORDERED TO PAY TRISTANGATE AWARD
On the 19th of December, it will be a decade since the owners of Tristan Oil secured a US$500m arbitral award requiring Kazakhstan to pay compensation for violating their obligations under the Energy Charter Treaty.
The Swedish arbitration tribunal ruled that “it is indisputable that Kazakhstan directly expropriated investments” and that the authorities had conducted “a string of measures of coordinated harassment.” The tribunal noted that these measures included false accusations of illegal conduct, fabricated criminal prosecutions, unwarranted tax assessments, and criminal penalties.
Since then, Kazakhstan has orchestrated a multi-jurisdictional campaign to avoid payment of the award. As a result, over the past ten years Kazakhstan has wasted millions on unnecessary legal and consulting fees.
The events of 2023 have clearly demonstrated the consequences of Kazakhstan’s actions:
- Former Minister of Justice, Marat Beketayev, who oversaw the multijurisdictional strategy to obstruct payment of the Tristangate award, was arrested on suspicion of ‘abuse of office.’
- The Svea Court of Appeal ruled that claimants of the Tristan Award can collect $75m of attachments belonging to Kazakhstan held in a Swedish bank.
- The Supreme Court in New York dismissed Kazakhstan’s false claims once and for all, with Judge Borrok describing Kazakhstan’s main argument as “an impermissible collateral attack of a confirmed arbitration Award.”
- Foreign Direct Investment (FDI) in Kazakhstan is lower today than a decade ago, with FDI from China, France, the UK & Germany falling by more than 40%.
- Concerns about Kazakhstan’s treatment of U.S. investors have hindered the progress of the bill to grant Permanent Normalised Trade Relations (PNTR) to Kazakhstan, which could, in turn, prevent Uzbekistan and Tajikistan from receiving PNTR status.
The tide is turning. The past ten years have cost Kazakhstan unnecessary legal fees and its treatment of international investors has severely damaged its reputation. It’s time Kazakhstan adopts a significantly different position on this dispute.
It’s time to resolve Tristangate.
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