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The Republic of Kazakhstan files a new request in Sweden for annulment after exposure that the Award was tainted by systematic criminal conduct by Stati

On 25 November 2019, the Republic filed a new motion with the Svea Court of Appeal in Stockholm to invalidate the 19 December 2013 arbitral award obtained by Anatolie Stati, Gabriel Stati, Ascom Group and Terra Raf Trans Traiding Ltd. ("Stati") in the amount of USD 497 million ("Award"). The reasons for the new motion are, among other things, the lack of arbitrability of the Stati´s claim as well as the Award´s incompatibility with fundamental principles of the Swedish legal system.

The Republic took this extraordinary step after new evidence was discovered proving that Stati’s alleged “investment” in Kazakhstan was tainted by systematic criminal conduct with significant international links and reverberations, and that Stati engaged in fraudulent actions to first procure the Award by deceiving the arbitral tribunal and subsequently to enforce the award in the courts in various countries.

The Republic obtained the new evidence through legal assistance by other states on the basis of international legal assistance treaties as well as from Stati's statutory auditors and through judicial proceedings in U.S. and UK courts. The new evidence reveals how Stati systematically used his Kazakh operations for illicit purposes, deceiving his investors, statutory auditors, rating agencies, state authorities in Kazakhstan and elsewhere, the arbitral tribunal, and courts in various countries.

During the arbitration, Stati asserted that measures of Kazakhstan had caused a financial crisis for Stati which ultimately led to the loss of his operations in Kazakhstan.The arbitral tribunal accepted these allegations and found that the Republic had violated public international law. The new evidence reveals that Stati deceived the arbitral tribunal. Stati did not disclose during the arbitration that his Kazakh operations failed because Stati had systematically looted hundreds of millions of US Dollars from his Kazakh operations. As was now exposed, Stati operated through an opaque web of numerous off-shore companies with the sole purpose of obfuscating the origins and whereabouts of the money raised through the Kazakh operations. The Republic obtained bank account statements of over 30 of Stati's offshore companies, thanks to analysis of which the opaque web of off-shore companies was exposed. In addition to being illegal under the laws of the Republic, these dealings equate to financial crimes such as fraud and money laundering in the countries in which Stati is currently seeking to enforce the Award, including at the seat of arbitration.

The new evidence also reveals how Stati used the revenues created through the Kazakh operations to pay substantial amounts of money to politicians and their family members in Kazakhstan, Moldova, Romania, South Sudan and Kurdistan. The payments in Kazakhstan are currently under investigation.

None of these facts were known to the Republic of Kazakhstan or the arbitral tribunal. Had Stati duly disclosed these circumstances, the arbitral tribunal would not have found that the Republic of Kazakhstan violated public international law. It is the Republic of Kazakhstan's firm view that Stati's dealings cannot be protected under public international law.

The Republic of Kazakhstan remains unconditionally committed to welcome foreign investors and to promote the rule of law in the country. But it will not tolerate that the wealth of the Kazakh people is abused to promote illicit dealings around the world. The Republic of Kazakhstan is confident that it will be fully vindicated by the Svea Court of Appeal in Stockholm and that justice will prevail.

The case has been filed with the Svea Court of Appeal under docket number: T 12462-19

Дата публикации
28 ноября 2019
Направления деятельности
Arbitration and Foreign Courts
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