Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://translate.google.co.uk/translate?hl=en&sl=uk&u=https://kosatka.media/uk/category/neft/news/v-minenergouglya-ne-opredelilis-s-pobeditelem-na-razrabotku-mestorozhdeniya-delfin&prev=search
In the Ministry of Energy and Coal Industry did not define the winner for the development of the deposit "Dolphin"
July 12, 2019
Interdepartmental commission at the Ministry of Energy and Coal Industry has not yet decided on the winner of the competition for the development of hydrocarbons within the Dolphin area. About this "Ukrainian power engineering" was informed in the Office of the oil and gas complex of the Ministry of Energy and Coal Industry.
Four companies were invited to participate in the state competition for the development and extraction of oil and gas at the Dolphin on the Black Sea shelf: Caspian Drilling International Ltd., Frontera, Trident Black Sea and Ukrnaftoburiny.
The opening of applications was held on June 12, 2019. The collection of proposals lasted only two months - from the announcement of the competition on April 12, 2019. Under the terms of the competition, the examination of applications should take place within one month.
President of the Presidential Administration Andriy Bohdan called for the continuation of the competition for the division of production for the Dolphin area on the Black Sea shelf for at least 120 days in order to increase the number of international companies and transparency of their assessment.
Previously, it was reported that journalists learned that Frontera Resources could get the right to develop and extract hydrocarbons at one of the largest gas fields in the Black Sea "Dolphin". The company has dubious gas projects in Georgia and Moldova, the financial report for 2018 shows its unprofitableness.
BP strategy - good for us?
https://www.oilandgaspeople.com/news/18938/bp-says-some-of-its-oil-wont-see-the-light-of-day/
The below has come up in the last hour. Confirmation that we have submitted a bid. Why do that if we were about to disappear? Makes no sense.
https://biz.censor.net.ua/news/3132041/zayavki_na_krupneyishee_mestorojdenie_na_shelfe_ukrainy_podali_4_kompanii
Applications were filed by four companies:
Caspian Drilling International Ltd, which is part of the Azerbaijani State Oil and Gas Corporation SOCAR;
Frontera Resources is an American company of businessmen Steve Nikandros and Zaza Mamulaishvili, who initiated the competition. Works in Georgia and Moldova. However, not a single large project has yet been implemented;
Trident Black Sea, one of the founders of which was the former State Duma deputy Ilya Ponomarev. In 2014, he voted in the State Duma of the Russian Federation against the annexation of the Crimea by Russia, and now lives in Ukraine;
Ukrainian CJSC "Ukrnefteburenie" oligarch Igor Kolomoisky, People's Deputy Vitaly Homutynnik and Russian businessman Gennady Fuchs. Source: https://biz.censor.net.ua/n3132041
Nothing sinister in the transcript process - standard procedure.
https://www.cand.uscourts.gov/filelibrary/145/GO%2059.pdf
Disappointed but not at all surprised by the injunction ruling. Entirely expected. I’m not sure it is of any real significance now in any event. That’s the first line of defence breached. The real test is what the liquidators do in relation to the movement of the asset. The motion for Plaintiffs to file a brief regarding monetary sanctions is interesting. I’ve done some digging this morning and think I have found the relevant part of the Californian Code of Civil Procedure that deals with this https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-128-7.html.
There appears to be some shennaningans that have been going on in terms of the way Hope’s case was put forward – whether that is factual inaccuracies, something more sinister or otherwise. That’s sparked the request for monetary sanctions by us. It is a side issue but not something you want being made against you..
Not the news we wanted. Disappointed but not surprised. I did think that after Hope filed his response that we were unlikely to get it. I was also a tad disappointed with our response. When you start relying on emotional factors such as the welfare of people in the surrounding area, it looks a bit desperate.
The other key omission which was very obvious was the lack of any response to our asset movements. I can’t say I’m surprised at this because it’s probably true but something that we obviously didn’t want to draw attention to. The other reason for not labouring the point was presumably it took away the urgency of the matter - a key requirement for a TRO and a factor the judge would have considered. If there are no assets to enforce the collateral against, where is the urgency? The plus side is that it gave us a belt and braces approach - defeat at the TRO stage doesn’t mean disaster.
I don’t think the 6th of June hearing will be worthwhile as Hope will have enough time presumably to do what he wants before then. Keep an eye out for further litigation to unwind the asset transfer and news of the winding up in the Caymann Gazette.
So it’s plan B now or now that the TRO decision has been made a new plan C. While we were unsuccessful in our injunctive relief it is worth remembering that Hope has also missed out on it. Had he know the asset transfer was taking place he would no doubt have sought one. He now has to go through the more complicated process of unravelling it. In addition, the TRO does not take away form the fact that a jury trial of the main action will still take place
Just some thoughts this morning.
Devex is spot on in terms of his assessment of the strategic nature of the litigation. Presently, with no injunction in force in Cayman, Hope will make hay while the sun shines. It's a no brainer to contest the TRO as he did the injunction in Cayman. He will be in a great position if he is successful and no worse if he is not.
In the event that the TRO (and then a permanent injunction) is granted, it changes the strategic litigation landscape massively. Hope then has to think about where he is (jury trial) and what he has to potentially lose. To some extent the merits go out of the window as the unpredictability of the process means that there is never more than a 70% chance of success and no slam dunk. That's the point when minds will be more focussed and the possibility of settlement, however unlikely that seems at that moment, starts to increase (even if infinitesimally). The next 48 hours are crucial.
There is a back up plan in the event that the TRO is not granted that has involved removal of the assets. As Dev says, that is risky but calculated. If we get that far - expect more litigation in the Cayman and possibly US.
Hi Spudsoil
Entirely normal - you draft it on your best case and what you want the judge to find.
Pophead
You usually gather evidence in advance of starting proceedings. Of course new evidence can come to light during the disclosure process or from third parties as the case progresses which we didn't have at the outset. For example, disclosure of all internal emails Hope sent around the time FRR were looking to re-finance - those would be of interest and may unearth something. There is no way FRR would have access to those at the outset.
Timster - there is a reason why the majority of cases don't reach a hearing and that is because no one can discount litigation risk. You have to factor in strength of your case/defence, the money at stake, the implications for you, reputational issues, costs (including costs you may have to pay) against the prize you are seeking. As a rule of thumb, I have never advised a client even with the strongest case that they have more than a 70% chance of success.
It's a good point Daniel1son. A lot of time is often spent on jurisdictional issues. Why? Because it can put your opponent at a significant disadvantage. Our summons cites case law which effectively states why the hearing should be heard in Californian - mainly because this is where Outrider is based. It wouldn't surprise me in the slightest if the Defendant argues otherwise on jurisdiction grounds (probably to avoid a jury trial). I suspect that's why we had a half day hearing in Cayman for the amended summons because Outrider objected. It was probably in there interests to keep the action in Cayman. It's all guesswork on my part I have to admit in the absence of documentation.
Tsbs - again pure conjecture by me but rather than lifting the injunction, it has been stayed (ie suspended). The quid pro quo of staying the Cayman proceedings may well have been the judge saying we lose the benefit of the injunction. Contrary to what others have said, Justice Kawaley was not keen on the prospects of success on the merits of our case. His comments on APPEALING are something different in relation to prospects of success. These comments on the merits worried me as judges give you strong signals at the outset of the way they are thinking. If I was advising FRR I would have told them that their chances of success were limited. It was a brave move by FRR switching to California but I certainly think that it was the right move. It's like a football manager who doesn't change his tactics or team when they are getting battered in the hope that something will change. Better to switch to a back four, front three or whatever and chuck on a couple of subs than to do nothing. For what it's worth, I think it was the right move. The hard part is seeing if the Californian courts agree with us. My only niggle is that reading the amended summons we say that there isn't much difference between Cayman and Californian law. But it's not always about the merits and as I said above, forum counts. A jury trial is a different proposition, particularly in the States. I always warn clients that no matter how strong their case, it will depend on the view and attitude of the judge and that is litigation risk. Magnify that by 20 for a jury. Hope will know that. That's why the collateral agreement excludes a jury trial.
Also look at the timings which are interesting. 14 April Frontera issue proceedings in California, 15 April hearing in Cayman, 17 April enforcement notices issued. What is odd is that we wait until 24 April to amend the summons to include injunctive relief proceedings. These injunctive proceedings are of the utmost importance to FRR and its very existence. I have injuncted the same night/next day in similar circumstances. I’m not an expert on the US legal system but 7 days in the circumstances is a long time. The amended summons for injunctive relief is virtually identical to the original summons filed in the Californian proceedings so not much extra work required there.
My guess is the delay was because they tried to work out a settlement but it appears that hasn’t proved possible. Once negotiations broke down , FRR had no alternative. So although on the face of it it appears that we are far away from resolving this matter the reality maybe that we are closer than people think.
Steve
We effectively find ourselves in the same position we were in when we applied for injunctive relief before the Cayman courts. The difference on this occasion is that we are now at the mercy of the Californian courts.
As usual, there are more questions than answers. Some quick thoughts:
Why, if we had injunctive relief secured in Cayman (albeit temporarily) did we issue proceedings in California to go through the whole process again? I suspect this is because ultimately we felt that we would lose on the merits given the Judge’s initial comments. There may be an element of forum shopping here and we took legal advice in California which offered better chances of success/create more tactical pressure(jury trial). Hope’s enforcement notice is also a direct response to the issue of proceedings in California and shows the battle really hotting up. Had we not issued proceedings there, I doubt he would have taken these steps (after all he had the chance since the alleged default occurred on 10 October 2018 and he hadn’t). I just hope the advice we have on securing injunctive relief accords with the Judge’s view.
The $64,000 question is what is the current status of the proceedings in Cayman? If the injunction was still in force then I sincerely doubt that Hope would have been able to issue an enforcement notice in Cayman or take any insolvency steps given that Frontera Resources Caucasus Corporation is incorporated in the Cayman Islands. There are three possible scenarios. The first that the injunction has been discharged. I don’t think this is plausible as the matter does not appear to have reached the Court of Appeal. The second is that Hope is ignoring the injunction and will rely on proceedings in California. That just seems plain daft. Thirdly, and the view that seems most plausible at the moment, is that the Cayman proceedings, including the injunction, have been stayed. This makes more sense given that there was a hearing for an adjourned summons in Cayman and the Californian proceedings were issued just before the hearing of the adjourned summons in Cayman. This theory also has credence because not once in the amended Californian summons do we reference the Cayman injunction and there being a breach of those terms. It also explains why Maples (Cayman based) have now issued the enforcement notice as if there was an injunction in place, I would assume (although I haven’t seen the terms of the injunction) it would apply to third parties and Maples/Outrider would be in contempt if it took steps in contravention of the injunction.
I think we will know one way or another very soon – injunctive proceedings are by their very nature urgent and it is even more pressing in this case. The Californian legal system seems transparent and expeditious so expect a hearing and decision very soon.
Hi Pophead
Yes that's the standard wording I referred to and it is for the future consideration of the court. It is usual for the party making an application to also attach a draft order for future use by the judge if he/she finds in their favour. The rationale is to quicken the process and so the judge has something readily to hand to approve/amend depending on what they decide. Hope that helps.
Standard wording when submitting a draft - done it so many times I can recite it now!
Morning All
Apologies for being brief but two quick points:
It’s easy to get carried away with the general euphoria (as did I this morning) at the moment but this needs to be tempered. Danie1son was right that this order has not been signed by the judge. I can’t tell from the documents whether a hearing has taken place for the injunctive relief. But it is part of the procedure for filing for injunctive relief that the party seeking relief prepares a draft order for the judge to sign (see below link). This appears to me what we have done and at this stage and no more. I really hope the hearing has taken place and the order just needs to be signed off on but in the absence of further documentation/evidence, I cannot make that leap. I sincerely hope someone else can help me do that. For what it’s worth, I think we will find out today or early next week at the latest.
Secondly, it is also interesting to note that the Collateral Agreement (Clause 7.13) specifically excludes a jury trial for any issues arising under that agreement. That is quite telling as it demonstrates a clear desire to stay away from this form of resolution. Of course the breach of fiduciary claims etc don’t arise from the above agreement and a jury trial has been deliberately chosen because it is the forum Hope least wants to be in. That appears to be a tactically astute move and it has certainly thrown the cat amongst the pigeons.
https://saclaw.org/wp-content/uploads/lrg-ex-parte-tro.pdf
As of 22 April 2019, we have filed our quarterly lobbying disclosure form for the first quarter of this year. Usual sum of £50k. Legal fees, lobbying fees, getting paid begs the question, how?
http://disclosures.house.gov/ld/ldxmlrelease/2019/Q1/301036100.xml
The revelation earlier this morning about the starting of proceedings in the US is likely to explain the purpose of today's hearing in Cayman. Multiple cases in different jurisdictions create legal and financial complications. Courts generally do not like parallel proceedings and the application this afternoon is probably to adjourn the Cayman proceedings, presumably on the basis that the same matter is now being litigated in the US and there is a risk of conflicting judgements.
The rules/law regarding adjourning/staying proceedings are complicated (court first seized, location of parties, witnesses, damages etc..) so it now makes sense why the matter has been listed for half a day.
I think we can safely say that the chances of a settlement have significantly reduced. Of interest is why have FRR started proceedings in the US. Could be because that's where any enforcement assets are based, they stand a better chance on the legal merits in the US than Cayman, enforcement of a Cayman judgment in the US may not be straightforward. Could be any one of these or a number more. There may also be tactical reasons. I suspect Hope will want to continue in Cayman given his earlier success. Although he was chided and lost in his recent injunctive claim, the Judge has already given his preliminary views on the breach of fiduciary duties claim which will have buoyed him. This by itself may explain why FRR have now started proceedings in the US.
Will be interesting to see what happens next. What will the court in the Caymans decide? Equally, I'm sure Hope and his team may try and get the US proceedings stayed on the basis that the matter is being litigated elsewhere.
The battle is getting bigger, costlier and more personal. Who needs Game of Thrones tonight?!
Hi Ivy
On the basis of the very minimal information we have it is impossible to tell what the exact position is and where we are in all this. It is all conjecture.
What we do know is that there are two sets of ongoing proceedings. The substantive claim which is the breach of fiduciary duties and the proceedings within the proceedings, namely for injunctive relief. We know that the Court of Appeal listing for April at this time does not include the ongoing skirmishes relating to injunctive relief. Those mini proceedings APPEAR at this time to be resolved (pending any changes to the court listing). I say that because the judge at first instance was clear that he wanted it listed at the earliest opportunity (a special sitting) and failing that the April sitting. Hope would have been desperate to list it then as well for obvious reasons. The abscence therefore is very telling. The question it does pose which I do not have the answer to is that if the injunctive proceedings have been resolved, On WHAT TERMS? Is that the parties will keep the existing order (as per the last injunctive hearing on the security point) because it protects both parties position until trial? Is it because additional security has now been provided rendering the injunction nuggatory? We can only speculate.
As for the amendment to the writ of summons, this relates to the original claim by Frontera. It is not a summons as I have seen alluded to on here to compel witness attendance. The Caymans judicial system uses the old terms that the English courts stoped using with the advent of the Civil Procedure Rules. Why are Frontera doing this? We can only guess again. It may be necessary following the terms/way in which the injunctive proceedings have resolved themselves? It maybe because disclosure has revealed something and they need to amend the original writ to plead a new cause of action? It may be that it wasn't properly pleaded at the outset. If there is an amendment and it is granted then there will be a knock on effect on the court timetable as Outrider will need to respond to the amendment and then disclosure and witness statements will need to also incorporate the effects of the amendment.
I was hoping that the abscence of the Court of Appeal listing would mean a settlement was close/ had been achieved. The appearance in the Grand Court next week means the main proceedings continue. The key question is what terms the injunctive proceeding were resolved on, assuming they have been resolved and how does this impact on the substantive claim.
Court of Appeal listing for Cayman just out for April and as far as I can see no Frontera listing. This is potentially fantastic news that either a settlement has been reached or about to be. It was clearly stated in the judgement at first instance that Frontera should do their best to list the Appeal for either a special sitting or the April sitting. The fact that we are not on there is cause for great optimism. I have often been involved in settlements where if we are on the verge the parties agree to tell the court not to list. Cautiously optimistic.
From Ukraine to Moldova now!! Is that Steve in the picture?
https://www.moldova.org/en/energy-investment-sector-moldova-discussed-united-states/