UK independent JKX, which in its results on March 20 had been hoping for an improvement in its relations with Ukraine, has instead been named in a court writ seeking to annul a recent arbitration award.
The company said March 21 that the previous afternoon it had received a notice by Ukraine’s ministry of justice to the High Court in London “naming JKX as a defendant in an application seeking to set aside the recent Uncitral arbitration award against Ukraine and in favour of JKX.”
JKX said it considers the application by Kiev to be “without merit and frivolous, and a troubling attempt to set aside the legally binding and legitimate award in favour of JKX.” It had said March 20 that the arbitration ruling awarded it some $12mn, rather than the $200mn it had sought.
JKX CEO Tom Reed (Photo credit: JKX)
“The basis for this application is that the arbitral tribunal allegedly committed ‘serious irregularity’ in conducting the arbitral proceedings. JKX notes that the chair of the tribunal was Judge James Crawford, who serves as a judge on the International Court of Justice in The Hague, having been elected by the UN General Assembly and Security Council to that post,” stated JKX March 21.
JKX said the latest action was “misguided” given that the company had said it wished to resolve legal disputes with Ukraine, and secure financing to accelerate the Rudenkivske gas development there. “We once again reaffirm that we are seeking a constructive dialogue with senior decision-makers in the Ukrainian government,” said JKX, vowing that meantime it would defend its interests in the High Court.
The company’s CEO Tom Reed spoke at London’s IP Week last month of Ukraine’s potential to produce more gas if the fiscal regime were more benign. Ukraine’s indigenous gas production could reach 40bn m³yr, double its current level, if appropriate inward investment and technology were encouraged, he said.