U.S. Court Ruling May Allow Oil Junior to Seize Congo Assets
U.S. Court Ruling May Allow Oil Junior to Seize Congo Assets
(Bloomberg) -- A U.S. court confirmed a $619 million international arbitration award against the Democratic Republic of Congo, potentially enabling a South African oil company to begin proceedings to seize Congolese commercial assets in America.
A federal judge in Washington on Tuesday granted DIG Oil Ltd.’s motion for recognition and confirmation of a decision made by the Paris-based International Court of Arbitration in November 2018. The ruling is the latest development in a 14-year dispute between the firm and the central African nation over oil rights.
DIG Oil “is seriously considering commencing enforcement proceedings in various international jurisdictions, seeking the full amount due to us,” Chief Executive Officer Andrea Brown said by email.
The French tribunal determined that Congo’s government failed to honor two production-sharing contracts signed when former President Joseph Kabila was in power and should pay DIG Oil $617.4 million. With costs, the Johannesburg-based company says it’s owed $619 million.
The award is registered in DIG Oil’s favor “with the same force and effect” as if it “were a final judgment of this court,” District Judge Richard Leon ordered. The company filed the lawsuit in the U.S. last year and Congo was subsequently declared in default for failing to respond to a summons.
Discussions on a potential out-of-court settlement have faltered, according to Brown. The government of President Felix Tshisekedi decided in May 2020 “to negotiate formally” with DIG Oil and both sides “approved in principle” a draft deal in December, she said.
Nine months later, “we have been very disturbed that no settlement agreement has been signed,” Brown said.
In May, France’s top court, the Cour de Cassation, rejected a second appeal by Congo against the award after the government failed to submit its brief within the deadline.
A spokesman for Congo’s government and another spokesman for Tshisekedi didn’t immediately reply to messages seeking comment.
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