Stans Energy Corp V.HRE.H

The Challenge Facing Stans

[joevest]

An award will likely be granted to Stans Energy by the Permanent Court of Arbitration (PCA).  However, the PCA cannot enforce this award. Enforcement can only be executed by the legal seizure of Kyrgyz assets in the relevant national courts.
 
This will be an uphill battle.  On July 12, 2016, the Ontario Court of Justice ruled that Centerra Gold shares are the property of Kyrgyzaltyn JSC and not the Kyrgyz Republic.  This ruling was a serious blow to Stans.  The Centerra Gold shares were, as a Stans official put it, the “low-hanging fruit,” the easiest route to asset seizure.  
 
With Centerra Gold shares off the table, Stans would have to pursue other assets.  But Kyrgyzaltyn owns not only shares in Centerra but also all of the Republic’s gold mining interests.  Kyrgyzaltyn also encompasses a health resort, jewelry store, medical center, and hotel.  The company is currently planning to change from a production enterprise into a management company with a holding structure. 
 
Any asset held by Kyrgyzaltyn would be extremely difficult to seize in the wake of the Ontario court’s decision.  Moreover, the Kyrgyz are not stupid.  I am not aware of the reasoning behind the Ontario court’s decision, but the Kyrgs can be expected to use this legal basis (if possible) to arrange all of their non-Kyrgzaltyn assets in such a manner as to obscure their connection to the Kyrgyz government.
 
Stans will have to prove that any asset they’re targeting is owned by the Kyrgyz government, a considerable task.  Because of the Kyrgyz victory in Ontario, there is virtually no chance of a settlement. The Kyrgs know that the road to enforcement will be long and arduous for Stans.  
 
Without enforcement of the presumed award, Stans is dead on arrival.  Stans has no other means—absent a commodities boom--to fund their Russian projects, or any other projects.   
 
If anyone disagrees with the above, I’d like to hear the basis of your thoughts.