Judgment No. 133/19 - VIII - Exequatur
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COPY Judgment No. 133/19 - VIII - Exequatur CIVIL JUDGMENT - EXEQUATUR Public Hearing of the Nineteenth of December Two Thousand and Nineteen Roll number CAL-2018-00013. Composition: Lotty PRUSSEN, President of the Chamber; Monique HENTGEN, Senior Adviser; Jeanne GUILLAUME, Senior Adviser; Alain BERNARD, clerk. Between: The REPUBLIC OF KAZAKHSTAN, represented by its current President of the Republic and, where necessary, by its current Prime Minister or any other body authorized for the purpose of prosecutions and proceedings by the Department for the provision of courts business under the Supreme Court of the Republic of Kazakhstan (administrative office of the Supreme Court of the Republic of Kazakhstan) at its address at Dinmukhamed Qonayev Street 39, Astana 010000, Kazakhstan, or otherwise by the Ministry of Justice, represented by the current Minister of Justice, located at 8, Orynbor Street, House of Ministries, Entrance 13, 010000 Astana, the Left bank, Kazakhstan, Appellant within the meaning of the act of the judicial officer: Véronique REYTER d'Esch-sur-AIzette of 2 November 2017, appearing on behalf of the public limited company Arendt & Medernach, registered at the Luxembourg Bar, established and having its registered office at L- 2082 Luxembourg, 41A, J.F. Kennedy, represented for the purposes hereof by Maître François KREMER, lawyer at the Court, resident in Luxembourg, and: 1) ASCOM GROUP S.A., a company incorporated under Moldovan law, established and having its registered office at MD-2009 Chisinau, Moldova, 75 Mateevici Street, represented by its current Chairman, or by any other body authorised for that purpose, 2) Anatolie STATI, resident at MD-2008 Chisinau, Moldova, 20 Dragomirna Street, 3) Gabriel STATI, resident at MD-2008 Chisinau, Moldova, 1A Ghioceilor Street, 4) TERRA RAF TRANS TRAIDING [sic] LTD a Gibraltarian company, set up and having its registered office at 13/1 Line Wall Road, Gibraltar, British Overseas Territory, represented by its current director, or any other body authorised for that purpose, Respondents for the purposes of the said REYTER Act, appearing on behalf of the limited liability company NautaDutilh Avocats Luxembourg, registered at the Luxembourg Bar, established and having its registered office at L-1233 Luxembourg, 2, rue Jean Bertholet, represented for the purposes hereof by Maître Antoine LANIEZ, lawyer to the Court, resident in Luxembourg. THE COURT OF APPEAL: FACTS and MATTERS PERTAINING Anatolie Stati is the holder of all of the shares of Ascom Group S.A. (hereinafter “Ascom”), a public limited company under Moldovan law. Anatolie Stati and her son Gabriel Stati each hold half of the shares in Terra Raf Trans Traiding [sic] Ltd (hereinafter “Terra Raf”), a limited liability company incorporated under the laws of Gibraltar. Between 1999 and 2005, Anatolie and Gabriel Stati, through Ascom and Terra Raf, acquired 100% of the shares of two Kazakh companies, namely Kazpolmunay LLP (hereinafter “KPM”) and Tolkynneftegaz LLP (hereinafter “TNG”), which were authorised by the Republic of Kazakhstan (hereinafter “Kazakhstan”) to explore and develop various oil and gas deposits in Kazakhstan pursuant to subsoil exploitation agreements. KPM is 100% owned by Ascom, which in turn is 100% owned by Anatolie STATI, while TNG is 100% owned by Terra Raf, which in turn is equally owned by Anatolia and Gabriel Stati. Anatolie Stati is also the 100% owner of Tristan Oil Ltd. (hereinafter “Tristan”), a company in the British Virgin Islands which was created, according to Anatolie and Gabriel Stati, for the sole purpose of financing the activities of KPM and TNG. In 2006, Ascom (and Terra Raf) via TNG started the project for the construction of a liquefied petroleum gas plant in Kazakhstan (hereinafter “LPG Plant”), in cooperation with the oil company Vitol FSU B. V. (hereinafter “Vitol”). At the end of 2008, the Kazakh authorities reported several serious breaches committed during the operations carried out by KPM and TNG. On 21 July 2010, the Ministry of Oil and Gas of the Republic of Kazakhstan terminated the land use licences of KPM and TNG. The oil fields have been taken over, through a trust, by the state oil company KazMunaiGas (hereinafter “KMG”) and its subsidiary KazMunaiTeniz (hereinafter “KMT”). 2 On 26 July 2010, Anatolie Stati, Gabriel Stati, Ascom and Terra Raf (together “the Stati”) filed arbitration proceedings before the Arbitration Institute of the Stockholm Chamber of Commerce (hereinafter “SCC Institute”) in Sweden, based on the Energy Charter Treaty (hereinafter “the ECT”), signed on 17 December 1994, for the promotion and protection of foreign investment in the energy sector. In an award of 19 December 2013, the arbitral Tribunal found that Kazakhstan had breached its obligations under the ECT with respect to the investments of the Stati and decided that Kazakhstan should pay the Stati the sum of USD 497,685,101.00 plus default interest (of which USD 199,000,000.00 was to be damages and interest for the LPG Plant). By means of a corrective award of 17 January 2014, the Tribunal made a correction to the costs of the arbitration and fixed the allocation of the arbitrators' fees. An appeal by Kazakhstan to set aside the arbitration award was dismissed by decision of the Stockholm Court of Appeal (hereinafter “SVEA Court”) of 9 December 2016. An appeal against this decision to the Supreme Court of Sweden has not been allowed. Various exequatur and enforcement proceedings have been initiated by the Stati in the United States, England, the Netherlands, Belgium, Sweden, Italy and Luxembourg. PROCEDURE By Order No. 40/2017 issued on 30 August 2017, a first Vice-President of the District Court of Luxembourg, replacing the President who was legitimately prevented from attending, declared enforceable in the Grand Duchy of Luxembourg, as if it had come from a domestic court, the arbitral award of 19 December 2013, issued by “The Arbitral Tribunal, Arbitration Institute of the Stockholm Chamber of Commerce” consisting of Prof. Karl-Heinz BOCKSTIEGEL, President, David R. HAIGH, QC, Co- arbitrator, and Prof. Sergei N. LEBEDEV, co-arbitrator, (hereinafter “the Award”), as corrected by the Award of 17 January 2014, between the Moldovan company ASCOM GROUP S.A., Anatolie STATI, Gabriel STATI and the Gibraltar company TERRA RAF Trans. Traiding Ltd, on the one hand, and the Republic of KAZAKHSTAN, on the other. By a writ of summons of 2 November 2017, the Republic of Kazakhstan lodged an appeal under Articles 1250 and 682 of the New Code of Civil Procedure, against the order served on it on 2 October 2017. The court was asked - first to declare that the Award is contrary to Luxembourg public policy as it is the product of an offence or fraud, therefore, under of Article V(2) b) of the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter “the New York Convention”), alternatively of Articles 1251(2), 1244(10) and 1244(12) of the New Code of Civil Procedure, to refuse or revoke respectively the exequatur Award, or else to order that the exequatur order be amended accordingly and to state that it 3 is of no have effect whatsoever in the territory of the Grand Duchy of Luxembourg, - Under the first sub-head, to declare that the essential formal requirements laid down in relation to the documents to be attached to the application for exequatur have not been complied with by the Stati, consequently, under Article IV(1) a) and b) of the New York Convention, in the second alternative under Article 1250 of the New Code of Civil Procedure, to refuse, respectively to revoke, the exequatur of the Award, alternatively to order that the exequatur order be amended accordingly and to state that it is of no effect whatsoever in the territory of the Grand Duchy of Luxembourg, - under the second sub-head, to declare that there was no valid arbitration agreement between the Stati and Kazakhstan, consequently, under Article V(1) a) of the New York Convention, in the second alternative under Article 1244(3) of the New Code of Civil Procedure, as referred to in Article 1251(3) of the New Code of Civil Procedure, to refuse or revoke, respectively, the exequatur of the Award, alternatively to order that the exequatur order be amended accordingly and to state that it is of no effect whatsoever in the territory of the Grand Duchy of Luxembourg, - Under the third sub-head, to declare that the Award was made by an improperly constituted arbitral tribunal, therefore, under Article V(1) b) and d) of the New York Convention, alternatively under Article 1244(6) of the New Code of Civil Procedure, as referred to in Article 1251(3) of the New Code of Civil Procedure, to refuse or revoke, respectively, the exequatur of the Award, alternatively to order that the exequatur order be amended accordingly and that it is of no effect whatsoever in the territory of the Grand Duchy of Luxembourg, - under the fourth and final sub-heading, to declare that the Republic of Kazakhstan must enjoy immunity from enforcement, the purpose of which is to protect the property of a sovereign State against all enforcement measures, and that consequently, the Award could not be the subject of the exequatur granted pursuant to the Order of 30 August 2017, consequently, to refuse or revoke the enforceability of the Award on that ground, alternatively, to order that the exequatur order be amended accordingly and that it is of no effect whatsoever in the territory of the Grand Duchy of Luxembourg. In any event, Kazakhstan acknowledges that, to the extent necessary, it offers to prove by evidence the following facts: 1. The main equipment of the LPG Plant was delivered, and its installation supervised, by the German company TGE Gas Engineering GmbH (hereinafter “TGE”), for a total amount of approximately EUR 32 million.