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Tribunal Terminates Arbitration Filed By Two-Time Felon

25.07.2022 08:38:41

On 9 July 2022, a tribunal formed by the International Dispute Resolution Centre under the rules of the American Arbitration Association terminated all claims filed by Litco LLC against the Republic of Kazakhstan, the City of Almaty, BTA Bank JSC, and a consultant retained by them.  The tribunal terminated the proceedings after the claimant took no steps to advance its case, including paying the fees of the arbitral body.  In February 2022, the tribunal warned the claimant that the arbitration would be terminated absent payment, and in June set a firm deadline of 7 July 2022 for claimant to pay its share, but it failed to do so.  Respondents, including Kazakhstan, Almaty, and BTA Bank, were prepared to defend the proceedings and had paid all fees attributable to them.

The arbitration was filed in 2019 by Litco LLC, an entity reportedly formed and owned by Felix Sater.  Sater, a twice-convicted criminal in the United States, is accused in a separate lawsuit pending in the United States District Court for the Southern District of New York of helping Mukhtar Ablyazov, Ilyas Khrapunov, and their accomplices to launder tens of millions of dollars stolen from Kazakhstan.  Those proceedings are ongoing.  Most recently, on 11 July 2022, United States District Judge John G. Koeltl, who is presiding over the federal court action, ruled that a filing by Sater was “plainly invalid” and struck it from the docket. 

Matthew L. Schwartz, managing partner of Boies Schiller Flexner LLP and lead counsel to BTA Bank and the City of Almaty in their U.S. proceedings, and to the Republic of Kazakhstan in the arbitration, stated:  “Now that the tribunal has decided to terminate the arbitration filed by Litco, all of the remaining claims are pending in a public forum, where they belong.  We look forward to presenting our evidence in a New York courtroom, and to focusing on what matters.  BTA Bank and the City of Almaty remain committed to tracking down and recovering their stolen billions and to holding all of Mukhtar Ablyazov’s co-conspirators responsible for their conduct.”

Among the other enforcement actions pending in the United States, BTA Bank’s claims against shell company Triadou SPV S.A., which invested approximately $70 million of BTA’s stolen money, are scheduled to go to trial later this year.