London South East | 21 March 2017
JKX Oil battle continues as Ukraine files application to UK High Court
By Joshua Warner
JKX Oil & Gas PLC on Tuesday delivered further bad news to shareholders regarding its long-running dispute with authorities in Ukraine, which have now applied to the UK High Court asking for a previous ruling in favour of JKX to be overturned.
JKX Oil shares were down 10% on Tuesday at 20.15 pence per share.
JKX Oil and Ukrainian authorities have been in dispute over allegations that JKX has underpaid tax, resulting in several raids by Ukrainian police on its offices. However, a UK court has previously ruled in favour of JKX.
On Tuesday, JKX said Ukranian authorities have now applied to the UK High Court asking to set aside the recent UNCITRAL arbitration award against Ukraine and in favour of JKX. UNCITRAL is the United Nations Commission on International Trade Law.
"We believe the application to be without merit and frivolous, and a troubling attempt to set aside the legally binding and legitimate award in favour of JKX. The basis for this application is that the arbitral tribunal allegedly committed ’serious irregularity’ in conducting the arbitral proceedings," said JKX.
"JKX notes that the chair of the tribunal was Judge James Crawford, who serves as a judge on the International Court of Justice in The Hague, having been elected by the United Nations General Assembly and Security Council to that post," JKX added.
The London-listed company said the "misguided new action is all the more disappointing" as the application was made just hours after JKX held its annual results call, when it reaffirmed its twin strategic priorities of resolving inherited legal disputes with Ukraine, and securing financing to accelerate the Rudenkivske field development project in the country.
"We continue to seek an amicable resolution of all previous legal claims between JKX and Ukraine, as we have stated since early last year and as recently as yesterday’s annual results call," said JKX.
The company said it is continuing to try to hold talks with Ukrainian authorities but said it will continue to defend itself in the UK High Court in the meantime.
"We repeat our call on the Ukrainian government to help us to successfully invest in their country, and allow us to establish a platform to meaningfully contribute to Ukraine’s energy independence," said JKX.