‘Recent Iraqi Supreme Court Decision Likely to Trigger Investment Arbitration Claims’: Gibson Dunn
ERBIL (Kurdistan 24) – Iraq may find itself subject to numerous claims in the range of tens of billions of dollars (if not more) before international fora for years to come due to the Iraqi Federal Supreme Court’s recent decision over the Kurdistan Regional Government’s (KRG) energy sector, said Gibson Dunn.
“The international oil companies affected by the Court Decision have numerous legal avenues for seeking redress as a result of the substantial harm they may suffer,” said Gibson Dunn on June 17. “It is therefore very possible that Iraq will find itself subject to numerous claims in the range of tens of billions of dollars (if not more) before international fora for years to come due to the Court Decision and the Government’s actions to implement that decision.”
Gibson Dunn pointed out that “Investors are expected to initiate arbitrations seated in London, England, and governed by the London Court of International Arbitration (LCIA) Rules, as expressly provided for in the Model Production Sharing Contracts (PSC).”
According to Wikipedia, “Gibson Dunn is an American multinational law firm headquartered in Los Angeles, California. Founded in 1890, the firm includes approximately 1,400 attorneys and 1,000 staff located in 20 offices around the world, including North and South America, Europe, Asia, and the Middle East. The firm is known for its litigation practice and in particular its strength in appellate law.”
In its ruling in February, the high court said the KRG is obligated to "hand over all oil production from oil fields in the Kurdistan Region and other areas from which the KRG's Ministry of Natural Resources extracted oil" to the federal government.
On multiple occasions, Kurdistan Region Prime Minister Masrour Barzani has firmly rejected the court's ruling, describing it as "unconstitutional." Nevertheless, he has said that his government is willing to make agreements with Baghdad based on the constitution.
Prime Minister Barzani also said that he hoped the Iraqi government would stay away from politicizing the KRG oil and gas portfolio and using it as a card against the people of Kurdistan.
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