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The experts of OLYMPEX ADVISERS successfully rendered services on representation and defense of the Client as a defendant in a claim of the Ministry of Energy of the Republic of Kazakhstan against the Client for recovery of penalty for failure to perform financial obligations under the subsoil use contract before the Supreme Court of the Republic of Kazakhstan under the rules of a court of first instance and cassation instance of the Supreme Court of the Republic of Kazakhstan.

The essence of the dispute in defense of the Client’s position was to contest an amount of penalty (30% of amount of the outstanding obligation). Namely, due to the Ministry’s unlawful inclusion in the planning figures of amounts of transportation costs that are not subject to accounting for the actual implementation of the work program, exclusion from the actual figures of costs for purchase of goods, works, and services, which were not included by the Client in the LCC report, failure to include performed R&D obligations in actual costs, etc. In addition, the position was proven that there were no grounds to impose a penalty due to objective circumstances of non-fulfilment of the work program beyond the subsoil users’ control (sharp decline in oil prices, optimization of drilling costs, avoidance of bankruptcy, etc.).

As a result of the proceedings, the Client’s penalty was reduced almost in half to 1.3 bln.tenge.

Notes: The name of the Client company for the services described above is not disclosed in accordance with the confidentiality agreement between the parties.

Project team

Serik Zhamanbalin, Yekaterina Nurperzentova