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Kurdish ministry claims success against Dana Gas at tribunal

By Rudaw 4/8/2017
Gas burns at an oil facility in the Kurdistan Region. File photo: Rudaw
Gas burns at an oil facility in the Kurdistan Region. File photo: Rudaw
ERBIL, Kurdistan Region — According to the Kurdistan Regional Government’s (KRG) Ministry of Natural Resources, a partial ruling from a tribunal in London rejected that Dana Gas “should be entitled to recover 100 percent of the fees and costs” of court proceedings in ongoing arbitration. Dana Gas stated the KRG has been ordered to pay 85 percent of the “consortium" arbitration costs.

“The tribunal reduced the legal costs the Claimants had claimed by millions of dollars to reflect the ‘success of the KRG’ in defeating the Claimants’ claim for payments for excess gas, which the Claimants had valued at over US $1.3 billion,” read a MNR statement on Thursday.

The Tribunal of the London Court of International Arbitration handed down its decision between the Kurdish ministry and the United Arab Emirates-based Dana Gas on July 31.

“The tribunal held that these claims, on which the KRG succeeded in full, were ‘in economic terms of considerable importance,'” added the MNR statement. “The Tribunal also held that the discount on their costs offered by the Claimants was 'inadequate to reflect the success of the KRG on the excess gas issue.”

The tribunal ordered the KRG “to pay US $14,046,485 to the Consortium within 28 days" at the Intercontinental Exchange London Interbank Offered Rate plus 2 percent interest from the date of the award and “bear 85 percent of the LCIA Arbitration fees and Tribunal's fees and expenses up to 27 November 2015 amounting to GBP 403,055.97, according to a statement from Dana Gas.

The MNR noted the tribunal’s ruling is only partial regarding some cost issues in the arbitration and is not a final determination on all costs issues (or all the other remaining issues) in the arbitration.

Although the arbitration is subject to confidentiality, the ministry also added that “the KRG is obliged to correct certain public statements by Dana Gas, which quote selectively from the ruling and create an impression that is materially misleading and incomplete.”

Additionally, the tribunal disallowed further significant legal costs the Claimants (Dana Gas) had claimed, according to MNR.

“The tribunal held that the Claimants had failed to discharge their burden of showing that these costs were properly recoverable,” according to the Kurdish ministry. 

The MNR said the decision reflects “the relative success of the KRG.”

Additionally, the MNR stated Dana Gas “have sought to make media statements that are selective, misleading and designed to harm the KRG.”

“The KRG hopes that, going forward, rather than disseminating misleading information in the media for their own purposes, the Claimants will focus their energies on working together with the Government and People of the Kurdistan Region in the best interests of all concerned,” added the statement.

Dana Gas and the MNR have an energy agreement.

“Dana Gas and its consortium partners have invested over US$1.2 billion so far and produced over 150 million barrels equivalent of gas and petroleum liquids, which has had a transformative positive effect on the local economy in the Kurdistan Region and in particular in providing gas to fuel affordable electricity supply,” read a statement from Dana Gas.



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