Investment arbitration with an American oil company decided in favour of the Republic of Kazakhstan has finally concluded

On March 25, 2022, the arbitration award in favour of the Republic of Kazakhstan related to the claim filed by the oil company Big Sky Energy Corporation(“Big Sky”) in the amount of 460.1 million US dollars is now finally сoncluded.

As previously reported, on November 24, 2021 (www.gov.kz/memleket/entities/adilet/press/news/details/290342?lang=en), the Tribunal appointed under the auspices of the International Center for Settlement of Investment Disputes dismissed all of the claims brought by oil company, Big Sky against the Republic of Kazakhstan and ordered that Big Sky reimburse the Republic of Kazakhstan about 575 thousand US dollars for its arbitration costs in defending the claims.

The deadline for filing for annulment of the Award has now passed on March 24, 2022 and since Big Sky has not applied for annulment of the Award, the arbitration is now finally concluded.

In the arbitration, Big Sky claimed significant damages, in the amount of 460.1 million US dollars, from the Republic of Kazakhstan which related to the execution of private contracts they had entered into with third parties unconnected to the state. Big Sky claimed losses from the state allegedly arising out of breaches of the investment treaty between the Republic of Kazakhstan and the United States (‘the Treaty’).

The Republic of Kazakhstan succeeded in demonstrating to the Tribunal that it had not violated the Treaty and that all the claims should be dismissed.

The interests of the Republic of Kazakhstan in this matter were represented by the Ministry of Justice of the Republic of Kazakhstan together with the law firm, Reed Smith LLP.

Commenting on this decision, the Minister of Justice of the Republic of Kazakhstan, Kanat Musin, said:

“The decision of the Tribunal fully vindicates the Republic of Kazakhstan. This and other successes of the Republic of Kazakhstan are testimony to its significant experience in defending the interests of the state in arbitration proceedings. Big Sky has not yet satisfied the costs order made in favour of the Republic of Kazakhstan, which funds are to be transferred to the state budget. The Republic of Kazakhstan will accordingly take steps to enforce the costs award. The Ministry of Justice will continue to protect the interests of the state in international arbitration using all appropriate mechanisms.”