Stans Energy Corp V.HRE.H

My attempt to explain where Stans is in its litigation

[Kaliahk]

I am going to try my best to explain where Stans sits based upon recent opinion of Canadian court setting forth the facts upon which it reaffirmed the injunction against the Kyrgs interest in Centerra. Stans instituted an arbitration; the Krygs did not provide a substantive defense: and Stans succeeded in obtaining basically a default judgment in its arbitration claim for $118 million. The Kyrgs disputed the arbitration tribunals jurisdiction in a recent appeal in the Russian courts (ex parte without Stans involvement in the case). That court issued an advisory opinion on jurisdiction but did not address the merits of the Stans arbitration (likely because Stans was not a party) and "remanded" the case for proceedings concerning the Stans case. In that remand the Kyrgs will be able to dispute jurisdiction. While arbitrations are typically final - an exception for this is when the arbitration tribunal does not have jurisdiction. I have no idea if that dispute will be successful or not, but if it is the Stans award will be set aside "without prejudice". This means that Stans will still have its claim but it will not have been reduced to an award. Should the award be set aside, the Canadian courts will dissolve the injunction regarding Centerra shares. That is, unless there is a pre-judgment attachment equivalent under Canadian law that allow the attachment of property to satisfy a judgment or award that might be granted and Stans can meet the requirements for obtaining such a remedy and provide a bond for what damages might result if the attachment is wrongfully imposed. If this were under US law, the bond required might be prohibitively expensive given the need for the Kyrgyz to move forward with a restructuring of Centerra. If remanded, Stans could still attempt to prove its claims in an arbitration tribunal with jurisdiction. If the Kyrgs are not successful in disputing jurisdiction, the award will stand. and the injunction with respect to the Centerra shares will stand. Stans would then have the right to enforce the final award by the sale of Cneterra shares. In the midst of this, Stans and the Kyrgs can negotiate a settlement of their claims. Given the Kyrgs approach so far, this seems unlikely to occur if they think they can get a decision on jurisdiction on remand soon. Again if they prevail, the injunction would go away and they could get the ownership of their shares in Centerra outside the jurisdiction of the Canadian courts. Stans could still continue to pursue its claims but then if successful they would have much more difficult time collecting. I think that if the Stans award was absolutely final and unappealable, the Canadian court would have forced a sale of the Centerra shares to satisfy their award, not merely placed an injunction. While Stans may ultimately prevail and the injunction continue until the shares can be used to satisfy the award, I feel that Stans has not been completely forthright about the litigation, and this could possibly subject them to shareholder claims in the future if it does not turn out that way. Goldgoose's prior comments are correct in my view. And again, this is why I do not believe there has been any significant share price movement given the news.