KRG Wins $26.8M in Arbitration vs. Genel Energy

By Kamaran Aziz

ERBIL (Kurdistan24) – In a major legal and financial victory for the Kurdistan Regional Government (KRG), an international arbitral tribunal has ordered Genel Energy Miran Bina Bawi Limited (GEMBBL) to pay the KRG more than $26 million in legal costs following a high-stakes arbitration dispute over terminated oil contracts.

The final ruling, issued on Friday, marks the conclusion of a years-long legal battle centered on the KRG’s termination of the Bina Bawi and Miran production sharing contracts (PSCs) previously held by GEMBBL.

In its Final Award on Costs, the tribunal ordered the company to pay the Government a total of $26,868,905.29, in addition to post-award interest. The decision follows a Partial Award on Merits issued in December 2024, in which the tribunal found that the KRG had lawfully terminated the contracts and dismissed all of GEMBBL’s claims.

The KRG has welcomed the outcome as a validation of its legal standing and contract enforcement authority. “The Government is very pleased with this successful outcome,” read a statement issued following the ruling.

The dispute had drawn attention across the energy and legal sectors, as it was seen as a litmus test for the KRG’s ability to manage oil contracts and defend its sovereign rights in international arbitration forums.

Genel Energy, a UK tax domiciled company, had sought significant damages after the KRG cancelled its involvement in the Bina Bawi and Miran gas field developments—projects that had long been delayed and mired in contractual disagreements.

By securing a favorable ruling on both the merits and the cost recovery, the KRG has not only shielded itself from liability but also recouped a substantial portion of its legal expenditures. The ruling sends a strong message to international energy firms and investors about the Kurdistan Region’s readiness to uphold contractual discipline and defend its decisions in international courts.

The Bina Bawi and Miran blocks, once touted as key components of the Kurdistan Region’s future gas export strategy, were effectively removed from Genel Energy’s portfolio in early 2021 after prolonged inactivity. Despite repeated extensions and renegotiations, the company failed to meet the development milestones required under the PSCs, prompting the KRG to take action.

Industry analysts say the ruling could reshape future investor strategies in the Kurdistan Region’s energy sector, encouraging firms to adhere more strictly to contractual obligations. It also strengthens the KRG’s legal credibility amid ongoing discussions with both Baghdad and foreign investors over the Region’s oil and gas autonomy.

As post-award interest continues to accrue on the $26.8 million figure, the KRG’s successful arbitration win represents not just a financial gain, but a firm assertion of its authority in managing one of its most strategically vital sectors.