MOSCOW, July 22 (RAPSI) - A court of appeals in Stockholm ruled to set aside an arbitration award Russia's Rosneft was ordered to pay to First National Petroleum for breach of partnership agreement, Kommersant newspaper reported on Wednesday.
A Swedish court of appeals has granted an appeal filed by Tyumenneftegaz, part of Rosneft. In 1992, FNP (US) and Tyumenneftegaz established a joint venture, Tyumteks. Tyumenneftegaz was to obtain a development license for the Kalchinskoye oil and gas field. A license was obtained in 1993 but only for Tyumenneftegaz, not the joint venture, and it still belongs to the company.
In December 2011, FNP filed a claim with the Arbitration Institute of the Stockholm Chamber of Commerce on compensation for damages caused by the terminated partnership. The company estimated damages at $173 million based on Tyumenneftegaz oil sales revenue in the local market. The court heard the claim in the summer of 2013 and ruled that the Russian company was to pay the damages.
Lawyer Jonas Eklund representing Tyumenneftegaz explained that the Swedish court of appeals found the ruling invalid because the court of arbitration stepped outside its competence. The judges ruled against Tyumenneftegaz based on the oral statement that the Russian company distorted the amount of estimated oil deposits. FNP did not officially report this breach but the court, nevertheless, considered it when making the decision.
The court of appeals also noted that each party was required to independently provide a legal foundation in support of its argument. The plaintiff did not refer to the defendant’s distortion of the data. Therefore, the court could not base its conclusion on this information.
Kommersant also reports that for the first time in many years, the company was able to have a Stockholm court ruling overturned.