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Eurasia
March 30, 2018 www.intellinews.com I Page 21
route. That left the country with China as its sole major gas customer via a new pipeline, with Russia having stopped purchases of Turkmen gas in 2016.
A more optimistic assessment of Turkmenistan was
lately issued by the International Monetary Fund (IMF). Following an IMF visit to the country at the beginning of March, it said that Turkmen growth was “supported by rising natural gas exports, import substitution, and expansionary credit policies”.
US court rules to enforce $520mn award against Kazakhstan
bne IntelliNews
The US District Court for the District of Columbia ruled on March 23 in favour of a Moldovan business- man, Anatolie Stati, granting the enforcement of
a $520mn arbitration award against Kazakhstan.
The move may pave the way for the freezing of US-based Kazakh assets. Last October, Bank of New York Mellon froze $22.6bn in assets owned by Kazakhstan's National Fund, but has since announced that it lifted the freeze.
Stati is trying to recover money he invested in
two companies holding operating licences for the Borankol and Tolkyn natural gas fields in Kazakh- stan, and in developing a liquefied petroleum gas (LPG) plant. He has claimed his firms in Kazakh- stan were nationalised with incomplete compen- sation and that he, his son and other business- men were subjected to substantial harassment from the Kazakh state, with the ultimate aim of forcing them to sell their investments cheaply.
In 2010, Stati asked for supplementary compen- sation under the Energy Charter Treaty (ECT), an organisation Kazakhstan has been a member of since 1998. The ECT’s arbitral tribunal issued its final decision in December 2013, under which Kazakhstan is required to pay $500mn to Stati’s company Ascom for unlawful nationalisation.
However, the Kazakh authorities have denied the allegations and refused to pay supplementary com- pensation. The Kazakh justice ministry alleges that
the Stati parties fraudulently inflated the construc- tion costs of the LPG plant through a series of un- disclosed related party transactions, and prepared falsified financial statements. The Stati parties then allegedly used these falsified costs and financial statements to illicitly obtain a bid for the LPG plant from the Kazakh state oil and gas company,
a Kazakh government statement said last October.
Legal proceedings have been launched in multiple jurisdictions as Stati tries to claw back the money, and the Kazakhstani authorities attempt to prevent this.
Ascom successfully took steps to enforce the rul- ing in Swedish and Dutch jurisdictions, where as- sets of the Kazakh state have been appropriated.
Meanwhile, the US court refused on March 23, for the second time, Kazakhstan's request to consider evidence allegedly demonstrating that the arbitral award was "procured by fraud." Kazakhstan first sought to introduce its evidence of alleged fraud.
On the other hand, the High Court of England upheld Kazakhstan on June 6, 2017, ruling that the December 2013 tribunal decision was based on fraud and its execution would be contrary to the public order of England. Later that month, the High Court also denied Stati the possibility of lodging an appeal against the decision. The Civil Division of the Court of Appeal then also turned down Stati’s request to appeal on January 11.