Energy
International Internet Magazine. Baltic States news & analytics
Tuesday, 23.04.2024, 17:58
Who benefits from judicial dispute over uranium…
However, there is the one interesting fact. Not known to the
general public, but the famous in Kazakhstan Canadian businessman Paul A. Carroll expressed a positive
assessment of this decision of Kazatomprom.
The reason for his positive assessment was his desire to receive the
compensatory damages from the sale of the company’s stocks.
Why Kazakhstan lawyers drew attention to the citizen of
Canada? That was a terrific story. We would like to remind the readers the
essence of the story in a few words.
In 1995-1997, World Wide Minerals (WWM) led by Paul A.
Carroll invested in the development of the largest uranium mining in
Kazakhstan. The project was of great importance because it dealt with such
strategic raw materials as uranium, and therefore, was under the control of
Kazakhstan government. WWM pledged to invest at least 100 million US dollars in
the nuclear industry in Kazakhstan. But the company went bankrupt, all her
production was curtailed, and the assets and property were sold. The Canadians blamed Kazakhstan for the bankruptcy of the profitable uranium
mines.
The Canadians didn’t mention that with the advent of WWM in
Kazakhstan, the uranium industry declined. The Canadians also didn’t pay any
attention to the fact that Tselinny Mining and Chemical Complex had losses of 9
million US dollars, and a level of production increased by almost 60 percent
after a half year of WWM presence in the country. They didn’t care about the
workers of the factories, who were sitting without wages for a long time, and
about the abandoned social facilities, which the Canadian company undertook to
maintain. You may ask why? Possible, all activity of WWM was aimed at the
resale of raw materials and making a profit.
Under such circumstances, the Kazakhstan side canceled the
contract with the Canadians and accused WWM of violating local laws and causing
damage to the enterprises as well as the environment. The company that expected
to get rich due to Kazakhstan uranium went bankrupt.
Mr. Carroll perceived the failure of the project in
Kazakhstan painfully, and he made a claim to the government of the country, and
then brought the case of Kazatomprom before
the International Court of Arbitration in Stockholm and the American courts.
The litigation between WWM and Kazatomprom is a ridiculous and strange story. All WWM’s attempts
to return the assets or receive compensation were unsuccessful. All courts (except
Canadian) endorsed the notion of Kazakhstan invariably. The Canadian company openly
broke the rules in Kazakhstan, and their mistakes were evident. Soon, the company
lawyers understood the hopelessness of the litigation on this flank and moved
the attack to the other. According to Mr. Carroll’s words, the main factor of
the company’s bankruptcy was Kazakhstan’s rejection to issue a license for the
export of uranium to the United States. In his opinion, it was a flagrant violation
of international law.
The “Other flank” is a bilateral treaty of investment
between Canada and the USSR dated 1989, which guaranteed the protection of
Canadian investments. The Canadian side decided to refer to this agreement. However,
Kazakhstan cannot be considered as the successor of the Soviet Union. It is sad
that such litigation didn’t characterize Canada as a reliable and honest
partner. But, we will talk about it later.
The company understood that it would be difficult to pass
their incompetence and inefficiency in conducting atomic affairs to the
government of Kazakhstan and arrange the situation in the way that nobody in
the world noticed the traces of ruin and decay of the uranium industry in
Kazakhstan. Then, the WWM’s lawyers decided to prove that Kazakhstan inherited
the rights of the USSR and bore responsibility for the agreement between the
two countries. Even the most authoritative US judicial authorities (where the
case was considered) were in perplexity from this case. And the Appeal Court of
Columbia district reminded to Mr. Carroll that the decision to issue or not to
issue an export license is the sovereign right of Kazakhstan based on the domestic
laws and decrees of the Republic.
One thing remains unclear. Why the government of Canada was
supportеd the WWM’s claims on
Kazakhstan? This judicial dispute complicates the bilateral regulations of the
countries. By being involved in losing situations, Canada explodes the
reputation on the country. The responsible people understand that such
litigation discredits the authority of Kazakhstan among foreign investors. As a
result, the country may counterclaim. Regardless this judicial dispute finishes
successfully or no, Kazakhstan government does not want that ordinary Canadian
taxpayer pays for the wrong decisions of one businessman and Canadian politics.
The cost of such cases may reach a significant amount of money, but the
reputation costs more.