Cassational court of Luxembourg has called off the arbitration decision, which required Kazakhstan to pay $500 million. Now, the case should be reconsidered in a court of appeals with renewed staff.
In August 2017 Moldovan moguls Anatol Stati and his son Gabriel, as well as companies Ascom Group S. A. and Terra Raf Trans Trading Ltd were notified that the arbitration decision about Kazakhstan’s case must be executed in Luxembourg. On December 19, 2019, this decision was confirmed by Luxembourg’s appeal court.
However, in March 2020 Kazakhstan filed a cassational complaint claiming that Luxembourg’s appeals court had failed to examine strong evidence of fraud by Stati. For example, the court didn’t take into account letters from Stati’s former auditors, including KPMG, which informed the court about the invalidity of Stati’s auditing reports for three years. On August 21, 2019, KMPG admitted that data provided by Kazakhstan about the fraud «is powerful evidence that must be taken into account to make the auditing report as precise as possible.»
On February 11, 2021 cassational court of Luxemburg allowed a claim of the Republic of Kazakhstan and canceled the decision of Luxembourg’s appeals court from December 19, 2019. According to the decision, the court of appeals did wrong when it refused to examine arguments of both sides and just relied on the proof offered by Stati. Given that breach of procedure, the cassational court has ruled to reconsider the case by new judges of Luxembourg’s appeals court.
As experts noted, this is not a common practice for cassational court to call off decisions of inferior courts.
Moreover, on January 8, 2021, the District Court of Luxemburg admitted that the criminal suit filed by the Republic of Kazakhstan against Stati has strong grounds and ruled to stop a civil lawsuit, which was initiated by Stati to arrest Kazakhstani assets. The court very carefully examined evidence about the fraud by Stati and has decided that there is a direct connection between Kazakhstani claim on fraud and civil lawsuits by Stati.
«We are hailing the decision by the cassational court of Luxembourg and expect that the appeals court will support our case against Stati. We are full of optimism because all these fraud schemes of Stati have already been confirmed by respectable experts while we haven’t seen any counterevidence from them,» said Marat Beketaev, Kazakhstani minister of justice.
Two businessmen from Moldova, Anatol and Gabriel Stati entered several lawsuits against Kazakhstan in 2010. In Sweden, they demanded Kazakhstan pay them about $4 billion. However, the court has decided to give them only $500 million, including the $199 million that father and son Stati have allegedly spent on a natural gas processing plant in Borankol. Later, the U.S. authorities provided Kazakhstan with evidence that Stati claims are based on big fraud.
According to the Ministry of Justice, both Stati were engaged in several questionable transactions that had only one purpose: to show a raise in costs. Later, Stati tried to use this data as proof in their lawsuit against Kazakhstan. However, the court has found out that Stati’s companies conducted payments to each other with no relevant justification.
Earlier, Kazakhstan has also won a case against Stati in the High Court of Justice in England, where Stati tried to seize assets of the National Bank of Kazakhstan.