Star Phoenix formally notifies Georgia government of dispute
Oil, gas and oilfield services company Star Phoenix updated the market on its legal dispute with the government Georgia on Friday, over a production sharing contract dated 29 March 2007 for block VIA.
The AIM-traded firm said that itself and Strait Oil and Gas (SOG), a private company incorporated in Gibraltar in which it holds a 65% interest and which entered into the PSC, had engaged new legal advisers Enyo Law LLP, and had been working with them on progressing an arbitration claim against the government of Georgia.
It said the advisers had now formally notified the government of Georgia of the existence of an investment dispute under the Energy Charter Treaty.
The board said the notice of dispute set out the position on SOG's unfair treatment in Georgia, and how its investment in Georgia - which exceeded $22m - had been damaged.
“In particular, the notice of dispute states that the termination of the production sharing contract by the government of Georgia, as well as the subsequent re-tendering of the same territory as Block VIA, to which it held exclusive rights under the production sharing contract, was unjustified, arbitrary and contrary to the provisions of the contract and has deprived SOG of the entire value of its investment,” the Star Phoenix board said in its statement.
“Georgia's measures constitute breaches of the protections established by the Energy Charter Treaty, including Georgia's guarantee to observe obligations it entered into with SOG by concluding the production sharing contract; not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment or disposal of the investment; that the investment would be accorded fair and equitable treatment; and that the management, maintenance, use, enjoyment or disposal of the investments would not be nationalised, expropriated or subject to measures having an effect equivalent to nationalisation or expropriation.”
Star Phoenix said that, while itself and SOG continued to hope that an amicable solution could be found to the dispute, they “fully reserve” all of their rights and remedies arising out of what they “strongly” believed to be Energy Charter Treaty breaches by the government of Georgia.
At 0827 GMT, shares in Star Phoenix Group were up 26.76% at 1.8p.