Moldova's Ascom moves ahead with recovering $500mn from Kazakh state

Moldova's Ascom moves ahead with recovering $500mn from Kazakh state
In the latest move in the lengthy legal saga, a Swedish court struck down Kazakhstan's appeal against the award.
By Iulian Ernst in Bucharest October 11, 2017

A Swedish court attached around $100mn of assets of the Kazakh state in favour of Moldovan investor Anatol Stati on October 5. Stati won in court compensation worth $500mn plus interest back in 2013, his firm Ascom announced on October 9 in a press release.

The latest court decision was part of Stati’s efforts to recover the money he invested before 2010 in two companies holding operating licenses for natural gas fields Borankol and Tolkyn in Kazakhstan, and in developing an LPG plant. Kazakhstan has constantly rejected the accusations and refused to pay supplementary compensation. The procedures should in principle continue with the sale of the assets frozen in favour of Ascom.

Stati claimed his firms in Kazakhstan were nationalised with incomplete compensation and asked for supplementary compensation in 2010 under the Energy Charter Treaty (ECT), an organisation whose member Kazakhstan has been since 1998. The ECT’s Arbitral Tribunal issued its final decision in 2013, ruling that Stati was entitled to $500mn worth of compensation. 

The investments of the Moldovan businessman in Kazakhstan and their subsequent nationalisation had a political dimension, since Stati’s companies could have provided energy independence to Moldova thus serving its pro-EU orientation, Mold Street magazine commented in December 2016 after the Swedish court ruled in favour of Stati.

The legal dispute continued after the ECT’s 2013 ruling with the enforcement of the decision regarding the compensation. Stati’s firms sought enforcement under several jurisdictions of the ECT, starting with Sweden (where the enforcement was finally judged and has reached the bailiff stage) and continued with the US and UK. Procedures similar to those in Sweden are expected in the other two states.

In the latest legal move in the case in Sweden, a court ruled in June against Kazakhstan’s appeal against the $500mn award. The case was judged in Sweden after the claimant sought and was granted permission to enforce the award in this jurisdiction, in 2014. Kazakhstan also applied in 2014 to the Svea Court of Appeal to set aside the award.

In order to execute the judgment of the Stockholm District Court of August 21, the bailiff of the Swedish Enforcement Authority issued, on October 5, 2017, another decision in favour of Ascom confirming the previous attachment of shares belonging to the state of Kazakhstan in 33 Swedish companies worth a total of $100mn, Ascom announced in its October 5 press release.

On September 8, the Amsterdam District Court also issued a judgment in favour of Ascom, by which the court authorised the attachment of Kazakhstan's property in the form of shares of the Samruk-Kazyna Fund, with a nominal value of about $5.2bn in the Dutch company KMG Kashagan BV, through which Kazakhstan participates in the international consortium to development its largest offshore oil and gas field Kashagan, Ascom announced in its October 9 press release. 

The company does not explain, but the move seems to be a result of the court decisions in Sweden (it might be in principle a direct result of the ECT’s 2013 decision, but the timing suggests that Dutch court also considered the latest developments in Sweden, namely the rejection of Kazakhstan’s appeal, in June 2017).