Frontera-Gogc: The International Arbitration Tribunal rendered its final award
21 April, 2020
On April 17, 2020 the International Arbitration Tribunal rendered its final award as to the matters in dispute between JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia, on the one part, and Frontera Resources Georgia Corporation and Frontera Resources US LLC, on the other part, arising out of Production Sharing Contract and Refinery Study dated 25 June 1997.
The Arbitration Tribunal has upheld the Claimants’ interpretation of the contract and satisfied a vast majority of the claims raised by JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia. Among the issues decided by the Arbitration Tribunal, it ruled that the Respondent - Frontera Resources Georgia Corporation committed material breach of the contract by refusal to relinquish and return to the State the exploration area, which represents almost 99% of the entire contract area.
According to the award Frontera Resources Georgia Corporation and Frontera Resources US LLC are obligated to reimburse the amount of the mineral usage tax payed by JSC Georgian Oil and Gas Corporation on behalf of Frontera Resources Georgia Corporation as well as the costs incurred by the claimants with regard to the arbitration proceedings.
The Arbitration Tribunal has also accepted withdrawal of and dismissed the counterclaims filed by Frontera Resources Georgia Corporation and Frontera Resources US LLC. The award of the Arbitration Tribunal is final and binding on the parties, in accordance with its terms and the contract.
Currently, JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia are considering further steps aimed at enforcement of the award and implementation of the rights and remedies granted under the contract.
The Arbitration Tribunal has upheld the Claimants’ interpretation of the contract and satisfied a vast majority of the claims raised by JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia. Among the issues decided by the Arbitration Tribunal, it ruled that the Respondent - Frontera Resources Georgia Corporation committed material breach of the contract by refusal to relinquish and return to the State the exploration area, which represents almost 99% of the entire contract area.
According to the award Frontera Resources Georgia Corporation and Frontera Resources US LLC are obligated to reimburse the amount of the mineral usage tax payed by JSC Georgian Oil and Gas Corporation on behalf of Frontera Resources Georgia Corporation as well as the costs incurred by the claimants with regard to the arbitration proceedings.
The Arbitration Tribunal has also accepted withdrawal of and dismissed the counterclaims filed by Frontera Resources Georgia Corporation and Frontera Resources US LLC. The award of the Arbitration Tribunal is final and binding on the parties, in accordance with its terms and the contract.
Currently, JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia are considering further steps aimed at enforcement of the award and implementation of the rights and remedies granted under the contract.