Dutch Supreme Court sets aside decision on attachment of Kazakh stake in Kashagan in Tristangate dispute
By bne IntelIiNews
The Dutch Supreme Court has set aside the Amsterdam Court of Appeal’s decision related to an attachment of Kazakhstan’s stake (via its sovereign wealth fund Samruk-Kazyna) in the international consortium developing the giant Kashagan oil field – a Dutch entity, KMG Kashagan B.V.
The case was just prior to Christmas referred back to the Hague Court of Appeal for further consideration as the Supreme Court deemed the appellate court’s assessment of immunity as based on an incorrect standard. The attachment, valued at $5.2bn, remains fully in place as security for the award of more than $540mn, payable to the owners and bondholders of Tristan Oil.
The Kazakh government, in 2010, nationalised assets associated with Tristan Oil, a company primarily set up for funding oil and gas projects in Kazakhstan. An arbitration tribunal in Sweden found in 2013 that the nationalisation stood in violation of international law and that significant monetary losses were suffered by the investors after “a string of measures of coordinated harassment by various institutions of Kazakhstan”. The tribunal awarded $500mn to the owners of Tristan Oil, but no payment by Kazakhstan has been made to date. The award was upheld in 2017 as final and non-appealable.
The dispute has led to the freezing of sovereign Kazakh assets worth $6.27bn worldwide, which includes the abovementioned attachment of $5.2bn of Kashagan shares.
“Today’s decision does not alter the fact that Kazakhstan is obliged to pay the award. The Kashagan attachment also remains in place,” a spokesperson for Argentem Creek Partners, the largest bondholder of Tristan Oil, said. “The Swedish Supreme Court’s decision upholding the award is final and non-appealable. By continuing to invoke spurious reasons for not paying, the Kazakh authorities are fighting a battle they lost years ago. We expect the Kazakh authorities to pay the award as soon as possible and stop the diversionary litigation that damages the image of Kazakhstan as an investment destination and in the process antagonizes foreign investors. As foreign investors, we call on the leadership of Kazakhstan to intervene and resolve this dispute. We stand ready to work with them to do so.”
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