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Legal Dispute International investment

Kazakhstan Resolves Dispute with Stati Amid Allegations of Litigation Profiteering

Kazakhstan’s government and representatives of the Stati family have reached an agreement to cease all legal proceedings regarding the case (Republic of Kazakhstan v. Ascom Group SA) with approval from major creditors, including an offshore investment vehicle of the Stati parties called Tristan Oil Ltd. The Stati side includes the family, as well as investors in Argentem Creek Partners (the investment manager of funds that lent money to Tristan Oil), and other possible shareholders. While the agreement comes after a fourteen-year dispute over oil and gas assets in Kazakhstan, its precise details remain confidential. Daniel Chapman, CEO of Argentem Creek Partners, was quoted in the Ministry of Justice statement as saying: “We support the framework agreement and commend President Tokayev’s decision to create a Fair Kazakhstan as part of his admirable reforms. With the settlement of this dispute, Kazakhstan is honoring international treaty obligations and, thereby, opening its doors to increased investment and heightening its economic growth potential. We welcome this new era for Kazakhstan.” Kazakhstan’s Minister of Justice, Azamat Yeskarayev said the agreement “was made in view of the public interest and does not involve the spending of budgetary funds,” and added: “We believe that this move will have a positive effect on attracting new investments in our country and on the growth of the economy.” A brief history of the dispute In 1999, Tristan Oil Ltd., an offshore company, was granted exploration and production rights at the Borankol oil field and the Tolkyn gas field located in the Mangistau region of Kazakhstan through the acquisition of Kazpolmunai LLP and Tolkynneftegaz LLP in the same year. Additionally, Tristan Oil Ltd. made investments towards the construction of a modern liquefied gas processing plant to become operational by the end of the 2000s. In 2010, assets of the Stati family were nationalized with the authorities citing their unlicensed activities, and were transferred to the trust management of KazMunayGas JSC structures. Moldovan businessmen decried the seizure as violating provisions of the Energy Charter Treaty, filed lawsuits claiming illegal seizure of their property, and began a legal battle in international jurisdictions that lasted for fourteen years. This event became a core component of the Republic of Kazakhstan v. Ascom Group SA case involving Tristan Oil Ltd. Kazakhstan’s representatives claimed that Stati’s creditor, Argentem Creek Partners, had conspired to enforce a tainted award. However, the lawsuit was dismissed by the Supreme Court of Sweden in a final June 2023 decision awarding $497.6 million to Stati parties. The court's decision mandated the Kazakhstan Government to disburse the initial instalment of approximately $76 million to the Stati family, along with accrued interest based on six-month U.S. Government bond rates, starting from April 2009. Additionally, the ruling included an allocation of $1.5 million to cover legal expenses. Despite the final and binding decision in Sweden, the legal battle showed no signs of abating, with cases continuing in England, the U.S., the Netherlands, Luxembourg, Belgium and Italy. The Ministry of Justice of Kazakhstan appeared intent on prolonging...

Expansion of Japanese Investment in Uzbekistan

On July 9, Uzbekistan president Shavkat Mirziyoyev held a meeting in Tashkent with a Japanese delegation including Tadashi Maeda, Chairman of the Board of Directors of the Japan Bank for International Cooperation (JBIC), and a representative of the Sojitz Corporation. Agreements were reached on the adoption of a three-year cooperation program with JBIC, as well as a roadmap with Sojitz Corporation for the implementation of potential projects in high-tech sectors of Uzbekistan’s economy. The Uzbek leader noted JBIC’s significant role in the implementation of investment projects in the country which today, includes a portfolio of joint initiatives worth over $3.7 billion in petrochemical and textile industries, energy, and infrastructure modernization. The president also expressed his deep appreciation of Sojitz’s implementation of projects in the country’s oil and gas sector. The Japanese company confirmed its intention to expand business activities in Uzbekistan, including, based on an agreement signed in 2022, the Syrdarya II IPP project, destined to become one of the largest power generation facilities in Uzbekistan. The Sojitz Corporation also announced its opening of a liaison office in Tashkent through which it aims to strengthen existing business as well as develop new business while striving to address regional needs across Central Asia.

Employment Oil and Gas International investment Oil refinery

Kyrgyz-Turkish Oil Refinery Nears Completion in South Kyrgyzstan

On July 8, Minister of Energy of the Kyrgyz Republic, Taalaibek Ibraev inspected the construction of the Kyrgyz-Turk K-OilGas oil refinery in the village of Kok-Talaa in the southern Batken region. An agreement between Kyrgyztransneftegaz (Kyrgyzstan) and Kyrgyz-Turk K-OilGas (Turkey) on the joint development of the North Sokh and Chongara Galcha oil fields was signed back in March 2023. According to General Director of Kyrgyztransneftegaz Aibek Chodonov, over 90% of the refinery’s construction has now been completed, and preparatory work is currently underway at four oil wells. The commission of the refinery is scheduled for the end of September. Investment in the project amounts to $91 million, and once in operation, the refinery will have a daily capacity of 500 tons of oil products. At present, the refinery has 51 employees, including 10 Turkish specialists and 41 local citizens, with 150 new jobs on the horizon from October. Kyrgyzstan has some oil deposits in the south of the country but today, imports almost all of its oil products (gasoline and diesel) from Russia.

Car Industry business and economy International investment International Cooperation Employment

Kyrgyz-Uzbek Automobile Plant Imports Components from Uzbekistan

On July 5, Chairman of the Cabinet of Ministers of the Kyrgyz Republic, Akylbek Japarov visited the northern Chui region to inspect the Tulpar Motors assembly plant, a joint Kyrgyz-Uzbek enterprise for the manufacture of Chevrolet and Isuzu vehicles. Construction of the plant began in May 2023 and the first car rolled off its assembly line in May 2024. Already in operation, the plant will be officially opened in July-August by the president of Kyrgyzstan. According to plans, within five years, the number of employees at the plant will reach 1,400 and the total investment in the project, will amount to $110 million. During the first year, Uzbekistan’s UzAuto Motors will invest $50 million in the assembly of 10,000 cars, beginning with the Chevrolet Nexia R3. At the initial stage, components will be provided by Uzbekistan but thereafter, will be produced inhouse to enable the Kyrgyz plant's manufacture of some 20,000 vehicles per year. During his visit, the head of the Cabinet of Ministers noted that the cars, trucks, and buses produced by the plant will meet the demand in Kyrgyzstan and be available for export to other Central Asian countries.

International Relations International investment Strategic Partnership International Cooperation China

Tajikistan and China Tighten Strategic Partnership

On his state visit to Tajikistan on July 5, Chinese President Xi Jinping confirmed China’s unwavering support of the country’s independence, sovereignty, and territorial integrity, and ready to develop a comprehensive strategic partnership between the two countries, engaged in negotiations with Tajik President Emomali Rahmon in Dushanbe. Opening the meeting, Rahmon said that for Tajikistan, strengthening a comprehensive strategic partnership with China is a priority, and added that Dushanbe firmly supports the one-China principle and opposes any form of Taiwan independence. As reported by Rahmon’s press service, the leaders discussed expanding cooperation in trade and economy, as well as Chinese investment in industry, energy, transport, agriculture, digitization of the economy, and artificial intelligence. Today, over 700 of Tajikistan’s industrial enterprises, including mining and mineral processing, are financed by Chinese capital, and looking ahead, the leaders earmarked the joint production of green technologies, and in particular, electric cars, solar panels and smart electric grids, as promising areas for cooperation. Following the talks, the Chinese president told journalists that the two sides agreed to focus on high-quality Belt and Road cooperation, promote the synergy of the two countries’ development strategies, and assist each other's modernization drive. Xi also announced China’s readiness to increase its importation of quality products from Tajikistan and pledged support for boosting the country’s transit potential. Later in the day, the Chinese and Tajik presidents attended the inauguration of new parliament and government buildings in Dushanbe, built with China’s support. As testimony to the strong relationship between the two, Xi Jinping presented President Rahmon with the Friendship Medal of the People's Republic of China; the first time the award has been received by anyone outside China.

business and economy Industry Bilateral Trade International Cooperation Transport and Logistics International investment

Uzbek Afghan Business Forum

On July 3, an Uzbek-Afghan business forum was held in Tashkent to coincide with the visit of an Afghan delegation headed by Minister of Industry and Trade Nuriddin Azizi. The major event, the forum was attended by heads of ministries and government agencies, industry, and over 1,000 business representatives from both countries. As reported by the Uzbek Ministry of Investment, Industry and Trade, Afghanistan is Uzbekistan's fifth-largest export market. In the last five years, trade between the two countries has increased almost 1.5-fold, reaching $866 million in 2023. Uzbekistan currently receives Afghan investment in 550 enterprises, 443 of which are wholly funded with Afghan capital. In his welcoming speech, Laziz Kudratov, Minister of Investment, Industry and Trade of Uzbekistan, highlighted several promising areas of cooperation, including diversifying the range of goods traded, and bolstering cooperation between producers and exporters with support of both countries’ respective departments and industry associations. The forum focused on initiatives to further develop mutual trade, such as the transition to round-the-clock border crossing operations, the establishment of trading houses, and the execution of major transport and infrastructure projects. Attention was drawn to the significant impact of more proactive engagement at the International Trade Centre in Termez on the Uzbek-Afghan border, where the creation of business-friendly conditions include a 15-day visa-free regime and tax-free zone. Nuriddin Azizi, Minister of Industry and Trade of Afghanistan, commended Uzbekistan's efforts to foster an environment conducive to bilateral trade, economic and investment cooperation. He also encouraged more proactive engagement between Afghan and Uzbek entrepreneurs by offering assurance of both sides' readiness to support new ventures and initiatives. The forum was complemented by the exhibition "Made in Afghanistan" which showcased the produce of 75 major Afghan companies from jewellery, textiles and food to electrical engineering, mining, transportation and logistics. The event concluded with the signing of several trade agreements in the chemical and agricultural sectors, as well as an agreement to establish a logistics centre. According to the Uzbek Ministry of Transport, Afghanistan is one of the key links in ensuring regional connectivity across Central and South Asia. In recent years, cargo transportation across Afghanistan has risen significantly and in 2023, the volume carried along the multimodal transport corridor Uzbekistan – Afghanistan – Pakistan increased 1.5-fold compared to 2021.