TRISTAN OIL SUCCESSFULLY COMPLETED A RESTRUCTURING TO ESTABLISH A SIGNIFICANT NEW FIGHTING FUND TO SUPPORT THE RECOVERY OF UNPAID AWARDS FROM KAZAKHSTAN.
Tristan Oil has successfully completed a restructuring of its liabilities which provides long-term funding to support the recovery of an unpaid approximately $500 million arbitration award from the Republic of Kazakhstan.
The restructuring establishes a new fighting fund to support the recovery of the unpaid award from Kazakhstan, who have sought to frustrate payment for a decade.
The restructuring included a Scheme of Arrangement sanctioned by the British Virgin Islands Court and is fully recognized by the United States Bankruptcy Court for the Southern District of New York, giving full force and effect to the Scheme within the United States.
In December 2013, a Swedish arbitration tribunal awarded Tristan Oil and its owners approximately $500m in compensation for a harassment campaign and illegal expropriation of assets by Kazakhstan’s authorities in 2010. The Award, which is final, binding and non-appealable, has since been recognized in multiple jurisdictions, including the U.S., Sweden, Luxembourg, Italy, and France.
Kazakhstan has refused to pay the award even though it has been fully adjudicated in Sweden. Instead, it has adopted a multijurisdictional legal strategy designed to frustrate enforcement. As a result, over the past ten years, Kazakhstan has wasted millions on unnecessary legal and consulting fees to law firms including Herbert Smith Freehills and Bolashak Consulting Group, an entity closely linked to former Justice Minister, Marat Beketayev. The multijurisdictional strategy to obstruct payment of the Award was overseen by Beketayev, who was recently arrested on suspicion of corruption. More recently, Norton Rose Fulbright mounted an expensive legal attack to disrupt the Tristan Oil restructuring, costing the Republic of Kazakhstan more money and ending in failure.
The amount payable by Kazakhstan in respect of the Award stands at over $560 million and is currently accruing interest at a rate of $25 million per annum. This money is owed predominantly to international bondholders.
With widespread creditor support for restructuring Tristan Oil’s debts through the scheme of arrangement, the new funding will allow creditors to pursue new enforcement actions against Kazakhstan across the globe. Law firms now working on various aspects of the enforcement efforts include UK-based Astraea Group and US-based Sequor Law, who represent the original claimants. Specialists in the fields of asset tracing and government relations have also been engaged to ensure the award is paid. Akin Gump represents the largest Tristan bondholder, Argentem Creek Partners.
For media enquiries, please contact [email protected]