Kazakhstan wins the arbitration proceeding versus Caratube company
11 June 2012
Kazinform/On 5 June 2012 the arbitral tribunal of the International Centre for Settlement of Investment Disputes (ICSID) adopted the decision on the case initiated by Caratube International Oil Company LLP (CIOC) against the Republic of Kazakhstan.
According to the press service of the Kazakh Justice Ministry, the amount of CIOC’s claims was in excess of USD 1.2 billion. The ICSID rejected these claims and ordered CIOC to pay USD 3.2 million in favor of Kazakhstan as a compensation for arbitration costs.
The arbitral proceeding was initiated 4 years ago. The main hearings took place in Paris.
The dispute was related to the termination of the contract for the exploration and production of hydrocarbons in the Caratube oil field, which was result of CIOC’s breaches and non-performance of the contract. According to CIOC the grounds for this arbitration were the ICSID Convention and the US-Kazakhstan Bilateral Investment Treaty because of the US nationality of Devincci Hourani, the alleged owner of CIOC.
Although formally CIOC is owned by Devincci Hourani, the Tribunal rejected CIOC’s arguments and found that it lacked jurisdiction. The Tribunal ruled that there was no proof that Devincci Hourani actually made investment and controlled CIOC.
The coordination of work on representation and protection of the Republic of Kazakhstan’s interests in this arbitration was conducted by the Ministry of Justice of the Republic of Kazakhstan.