RE: Thank you24 Apr 2020 22:44
Georgia's Oil Co. Prevails In Contract Fight With Frontera
Law360 (April 23, 2020, 6:11 PM EDT) -- The country of Georgia's state-owned oil and gas company says it has prevailed in arbitration involving the Texas-based Frontera Resources following a dispute that arose out of a 1997 production-sharing contract.
JSC Georgian Oil and Gas Corp. said Tuesday that on April 17 a tribunal upheld its interpretation of an underlying contract, at the same time also upholding the majority of its claims brought against Frontera Resources Georgia Corp. and Frontera Resources US LLC.
The arbitration had also involved LEPL State Agency of Oil and Gas of Georgia alongside Georgian Oil and Gas.
The tribunal concluded in the proceeding that Frontera Resources Georgia had materially breached the contract by refusing to relinquish the exploration area — the location of which wasn't described in the statement — back to the Georgian state, Georgian Oil and Gas said.
The award obligates Frontera Resources Georgia and Frontera Resources US to reimburse the amount of mineral usage tax that Georgia Oil and Gas had paid on the Georgian unit's behalf, as well as the costs incurred in the proceeding by Georgian Oil and Gas and LEPL State Agency of Oil and Gas of Georgia. Counterclaims asserted by Frontera Resources were dismissed, according to the statement. The company did not provide specific numbers.
"Currently, JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia are considering further steps aimed at enforcement of the award and implementation of the rights and remedies granted under the contract," Georgia Oil and Gas said.
Additional details about the award were not immediately available on Thursday. According to local Georgian news reports, an arbitration initiated by Georgian Oil and Gas Corporation and State Agency of Oil and Gas had to do with unpaid salaries to Frontera’s Georgian employees. It’s unclear whether the April 17 award relates to that proceeding.
Representatives for Frontera, which says it operates in emerging markets in Eastern Europe around the Black Sea, could not immediately be reached for comment on Thursday.
Frontera is among six investors carrying out oil production activities in Georgia, according to Georgia Oil and Gas. Frontera says that the "core" of its operations efforts is focused in Georgia, where it holds a license for an oil block in the upper Kura basin. The Kura is a river that drains into the Caspian Sea via Azerbaijan.
Frontera was mentioned by name in a letter sent by U.S. Congressman Markwayne Mullin, R-Okla., to Georgian officials earlier this year, in which he expressed "increasing concern regarding Georgia's continued decline from democratic values and the associated decay of its economic prosperity."
The congressman noted in his letter that foreign direct investment in Georgia is on the decline because U.S. and European businesses have been "subjected to harassment
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