Funds of the Kazakhstan National Fund seized in The Netherlands


While our Ministry of Justice is suing investors, in Europe the shares belonging to Kazakhstan in companies registered in the Old World have been seized.

In particular, according to the decision of the Amsterdam District Court, $ 5.2 billion worth of shares were seized in the Dutch company KMG Kashagan B.V., which in turn owns a 16.88% stake in the North Caspian Consortium, which is developing the unique Kashagan deposit on shelf of the Caspian Sea.

In addition, as stated in the communiqué of the press service of the company Ascom Group, the Amsterdam court allowed to seize the funds of the National Fund of Kazakhstan, transferred to the management of the Dutch branch of the American bank BNY Mellon, and those of Kazakh real estate in the Netherlands.

In Sweden, bailiffs seized shares of the government of Kazakhstan in 33 Swedish companies worth about $ 100 million, as well as the money necessary to pay tax on dividends from these shares.

The decision was made by the Central Service of Bailiffs of Sweden to execute the decision of the Stockholm District Court as of August 21 this year, the press service of the Ascom Group reports.

The press release notes that court executors rejected requests of the National Bank of Kazakhstan, which wanted to intervene in the process as a third party and demanded to lift the arrest.

The Ascom Group is no stranger to Kazakhstan. Once this holding, controlled by the Moldovan oligarch Anatoly Stati, invested in oil production in the Mangistau region.

In 2008, the subsidiary companies of the Ascom Group Tolkynneftegaz and Kazpolmunai faced serious problems with the Kazakh authorities, resulting in the termination of the contract and the imprisonment of the top manager of Kazpolmunai.

The latter, however, managed to escape from jail after having stayed there for less than a year and even without having a passport safely reached Moldova.

After that, the investor filed a lawsuit against the government of Kazakhstan for international arbitration, accusing it of raiding his property and demanding compensation for hislosses.

In January 2014, the arbitration court of the Stockholm Chamber of Commerce ruled that there had been a violation by Kazakhstan of the Energy Charter Treaty in the form of seizure of foreign investment, and awarded $ 506 million to the plaintiffs.

The Kazakh Justice Ministry attempted to challenge this verdict, however on December 9, 2016, the Stockholm Court of Appeal refused to revoke the arbitration award.

Then the lawyers hired by the Ministry of Justice filed a lawsuit in the Chamber of Economic Affairs of the Judicial Collegium of the Royal Bench of the High Court of Justice (English court), accusing Stati of artificially inflating his investment.

On June 6, the British court agreed with the arguments of the Kazakh side. As noted in the press release of the Ministry of Justice, Kazakhstan was able to prove in the English court that Stati, using an affiliated English pacifier company named Perkwood, "fraudulently overstated the cost of equipment supplied for the construction of the gas processing plant, in excess of $ 100 million. In fact, the equipment was produced and delivered by an independent German company acting in good faith, for only a small part of this amount. Other fraudulent actions included payment of a fee for fictitious management services of $44 million and payment for non-existent equipment of $72 million. These fictitious amounts were reflected in the audited financial statements of Stati companies."

Talking about this decision, we then asked ourselves questions concerning legal conflicts that arise when different courts in different jurisdictions make opposite decisions on the same dispute.

It has appeared that the decision of the British court is not binding for Swedish and Dutch ones.

As a result, the National Fund of Kazakhstan will pay up for everything.

By Oleg Chervinsky for