New York City – On Tuesday, 19 March, 2024, the Eastern Caribbean Supreme Court of the British Virgin Islands (BVI) rejected an application brought by lawyers on behalf of the Republic of Kazakhstan (RoK) and the National Bank of Kazakhstan (NBK) to be declared interested parties in relation to a scheme of arrangement between Tristan Oil and its creditors and to prevent implementation of the scheme.

On 22 December 2023, Tristan Oil completed a restructuring of its liabilities through the scheme, which provides long-term funding to support the recovery of an unpaid arbitration award from the Republic of Kazakhstan worth approximately $580 million. The restructuring and scheme were approved by both the BVI and U.S. Bankruptcy courts.

Kazakhstan’s lawyers then filed three applications to attempt to derail the scheme. In rejecting the first of these efforts (an interim attempt to stay implementation in the BVI), the BVI court admonished Kazakhstan’s counsel for its “most unusual application,” which was “very tardily filed.” The second application, objecting to Chapter 15 recognition proceedings in the U.S., was rejected after a short hearing and the scheme has been granted full recognition in the U.S.

In this latest ruling, the BVI Supreme Court rejected the third of these applications and commented that it “appears to be another attempt to frustrate the efforts of the Company and the Claimant Parties from recovering the huge amounts that are still owing on the Award.” It is anticipated that the court will also order the RoK and NBK to pay Tristan Oil’s legal costs in connection with this latest application, estimated at hundreds of thousands of dollars.

Daniel Chapman, CEO of Argentem Creek Partners, the largest Tristan Oil bondholder, commented:

“For over a decade, international legal counsel appointed by the former Kazakh Minister of Justice Bekatayev have driven a strategy of obstruction and jurisdiction-shopping to frustrate payment of a fully binding and non-appealable Award, including this latest failed effort to derail an agreement amongst Tristan Oil’s creditors. This ill-advised legal strategy of long-shot, failed attempts to delay enforcement has wasted resources and come at a huge expense to the Kazakh taxpayers. Certain lawyers and former Kazakh officials have been abusing international legal systems for years, potentially in part for their own self- enrichment, while also cynically squandering US taxpayer money along the way. A reform minded Kazakhstan deserves better.

The restructuring scheme establishes a broadly-supported significant new fighting fund which will ensure international investors can continue to seek recovery of the unpaid Award, now worth approximately $580 million. We welcome this decision and look forward to resolving this dispute with the Republic of Kazakhstan in a timely and constructive manner.”