Stati filed this lawsuit in June 2017. In it, Stati asked the New York court to enforce the Swedish Court of Appeal December 2016 decision as a foreign country money judgment. The Stati lawsuit had two counts. Count I sought to enforce the circa $500 million amount of the ECT Award. Count II sought to enforce the Swedish court’s circa $3.5 million costs order.
In September 2017, the Republic filed a motion that asked the New York court to dismiss the case as legally defective or, in the alternative, stay the case. In September 2018, the New York court stayed the case pending the outcome of the Republic’s appeal proceedings in Washington, D.C. In October 2019, the New York court ordered the parties to file a joint status letter by 15 November 2019, explaining whether they intended to proceed with the case given the conclusion of the Washington, D.C. appeal proceedings.
One of the factual defenses to the New York lawsuit is that the Swedish judgment was obtained by fraud. In the joint status letter ordered by the New York court, the Republic would have requested that the court rule on the Republic’s pending motion to dismiss. If that motion was denied, the Republic would have asserted all of its available factual defenses, including that Stati obtained the Swedish judgment by fraud. The Republic would have been entitled to take discovery from Stati regarding this defense. Stati, rather than file the court-order joint status letter, unilaterally dismissed their lawsuit. In so doing, Stati escaped a ruling from the NY court on the Republic’s pending motion to dismiss as well as discovery and litigation regarding the Republic’s factual defense that Stati obtained the Swedish judgment by fraud.
As previously disclosed, in June 2017, the High Court of England issued a 22-page fully-reasoned opinion finding that “there is a sufficient prima facie case that the ECT Award was obtained by fraud,” and that the interests of justice required that this issue be examined at trial. In response, Stati voluntarily dismissed his own enforcement proceedings in England, but on condition that he never re-institute enforcement proceedings in that country and also pay the Republic substantial legal fees and expenses.
Currently, the Republic is litigating the Stati fraud in multiple jurisdictions, including Belgium, the Netherlands and Luxembourg. Republic submitted evidence of the Stati fraud, including the sworn testimony of Stati’s former CFO, Mr. Artur Lungu, that Stati made a series of materially false misrepresentations to KPMG Audit LLC this evidence and conducting its own independent review, issued a written notice on 21 August 2019, invalidating all of their eighteen (18) audit reports for the financial statements of the Stati companies that operated in Kazakhstan covering three (3) years, stating that “reliance should not be placed on the audit reports issued by KPMG Audit LLC”.
Photo source: picture from an open source