The Court Seized the Assets of Baker Hughes for $50 Million at the Request of Yamal LNG
The arbitral tribunal agreed to provisional measures.
The Arbitration Court of the Yamalo-Nenets Autonomous District ruled on the application of Yamal LNG LLC. The company filed a demand to seize the assets of the American Baker Hughes Baker Hughes Rus Infra.
According to the case file, Yamal LNG demanded the adoption of preliminary interim measures in the form of seizure of funds, movable and immovable property of LLC Baker Hughes Rus Infra. The arrest is supposed to be imposed on assets within the amount equivalent to 50.7 million US dollars at the exchange rate of the Central Bank of the Russian Federation on the date of arrest and 47.3 million rubles.
“According to the applicant, <…> the defendant commits acts of bad faith, which indicate that he, in principle, does not intend to fulfill his obligations to Russian counterparties under the pretext of illegal and unilateral sanctions imposed by unfriendly countries, which, taking into account the center of economic interests of the defendants, entails the impossibility of executing the arbitral award outside of Russia,” the court documents say.
Yamal LNG points to a high probability of further disregard for the rights and interests of the applicant. Representatives of the Russian company believe that the asset of the American holding will not voluntarily compensate for losses. In addition, the applicant points out that “the interpretation by European counterparties of the current regulation in the field of sanctions suggests that it will be practically impossible for the applicant to obtain satisfaction of his claims outside of Russia.”
“The defendant is actively alienating its Russian assets and refusing to participate in projects in Russia, which entails the risk of the impossibility of enforcing the future arbitral award in Russia <…>. Failure to take interim measures may result in significant damage to the applicant,” the court documents also state.
In March, a claim was filed against Baker Hughes Rus Infra demanding the return of $11 million in advance payments for parts not delivered by Baker Hughes. In addition, Yamal LNG intends to recover $6.6 million for unproven but paid maintenance services.
Plaintiff contends that Defendant also owes the cost of 12 dry gas seals that Baker Hughes was given for repair and wrongfully withheld for $1.5 million. In addition, the American asset must recover losses on a replacement transaction, on service contracts and other obligations. The Russian company also intends to return the funds that were transferred to Baker Hughes as compensation for customs duties under the agreement in the amount of 47.3 million rubles.
“In addition, a notice of termination of the contract was sent to the defendant, including in connection with a significant violation by the defendant of his obligations. The Claimant also filed a claim against the Defendant for compensation for termination of the contract in the amount of USD 31,557,641.17. The listed requirements of the applicant were not satisfied by the defendant. To protect its rights, Yamal LNG OJSC indicates that it plans to initiate proceedings in international commercial arbitration administered by the International Chamber of Commerce,” the case file says.
The ruling of the Yamal arbitration states that the claims of Yamal LNG have been satisfied. This includes the seizure of cash balances and funds that will go to the accounts of Baker Hughes Rus Infra in the future, including the accounts of AO CitiBank.
“To determine the period of validity of preliminary interim measures of 15 working days, if during this time the main claim is not filed with the arbitration court,” the case file says.
The decision has now entered into force. However, it can be appealed within a month from the date of adoption by filing an appeal to the Eighth Arbitration Court of Appeal. No information about the appeal was published in the file of arbitration cases.
