Enwell Energy PLC Arkona - Legal Challenge to Validity of SC Licence (2925F)
November 04 2022 - 3:00AM
UK Regulatory
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RNS Number : 2925F
Enwell Energy PLC
04 November 2022
4 November 2022
Enwell Energy plc
("Enwell" or the "Company")
Arkona - Legal Challenge to Validity of SC Licence
Enwell Energy plc (AIM: ENW), the AIM-quoted oil and gas
exploration and production group, provides an update regarding
further Ukrainian legal proceedings in respect of its
Svystunivsko-Chervonolutskyi exploration licence (the "Licence") in
Ukraine, which is held by LLC Arkona Gas-Energy ("Arkona"), which
was acquired by Enwell in March 2020 (see announcement dated 24
March 2020) .
Since the Company completed the acquisition of Arkona, there
have been a number of legal challenges relating to the Licence. As
announced on 3 July 2020 , P JSC Ukrnafta ("Ukrnafta"), as
claimant, brought legal proceedings against Arkona, as defendant,
in which Ukrnafta made claims asserting that irregular procedures
were followed in the grant of the Licence to Arkona in May 2017.
Ukrnafta also brought these proceedings against the State Service
of Geology and Subsoil of Ukraine ("SGS"). Both Arkona and SGS
disputed these claims. In these proceedings, the First Instance
Court in Ukraine made a ruling in favour of Ukrnafta, determining
that the grant of the Licence was irregular, and accordingly, the
Licence would be invalid. Arkona filed an appeal of this decision
in the Appellate Administrative Court in Kyiv, and on 29 September
2020, the Appellate Administrative Court ruled in favour of Arkona,
overturning the earlier decision of the First Instance Court.
Ukrnafta filed a further appeal in the Supreme Court in Kyiv, and
in February 2021, the Supreme Court ruled that the arguments raised
by Ukrnafta in the appeal were not substantiated, and that the
proceedings against Arkona should be dismissed. The decision of the
Supreme Court represented the final appeal procedure in respect of
these legal proceedings, and accordingly, these proceedings against
Arkona were exhausted.
Prior to the Company's acquisition of Arkona, Ukrnafta had
previously issued legal proceedings in 2018, raising substantially
the same claims, which proceeded through the First Instance Court
and Appellate Administrative Court, before a final appeal was
determined by the Supreme Court in October 2019, in which
Ukrnafta's claims were denied.
In April 2021, an entity named JV Boryslav Oil Company
("Boryslav"), which is 25.0999% owned by Ukrnafta, issued a further
legal claim, also claiming that irregular procedures were followed
in the grant of the Licence, which claim was denied by the First
Instance Court in July 2021 and by the Appellate Administrative
Court in October 2021. There was no further appeal in this case and
so the decision of the Appellate Administrative Court in these
legal proceedings is final.
In September 2021, Boryslav issued a further legal claim, again
claiming that irregular procedures were followed in the grant of
the Licence, against the SGS, the State Commission of Ukraine for
Mineral Resources ("SCP") and Arkona, as defendants, with Ukrnafta
named as a third party. In this claim, the First Instance Court
made a ruling in January 2022 in favour of Boryslav. This ruling
was appealed to the Appellate Administrative Court, and on 2
November 2022, the Appellate Administrative Court made a ruling in
favour of Boryslav, to uphold the decision of the First Instance
Court, with the effect that the Licence is now ruled invalid. The
effect of this latest ruling is that the Company cannot conduct any
field activities on the Licence area. It is now intended to appeal
this decision of the Appellate Administrative Court to the Supreme
Court.
The Company's announcements dated 24 March 2020, 3 July 2020, 31
July 2020, 30 September 2020, 23 November 2020 and 11 February 2021
provide additional information.
Sergii Glazunov, Chief Executive Officer, said: " While we are
extremely disappointed by this adverse ruling made by the Appellate
Administrative Court, which we believe is unjustified, particularly
having regard to the previous decisions made by the Supreme Court
in favour of Arkona, we intend to pursue all measures to challenge
this ruling and protect our legal rights to this Licence area
."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, which forms part of United
Kingdom domestic law by virtue of the European Union (Withdrawal)
Act 2018, as amended.
For further information, please contact:
Enwell Energy plc Tel: 020 3427
3550
Chris Hopkinson, Chairman
Sergii Glazunov, Chief Executive Officer
Bruce Burrows, Finance Director
Strand Hanson Limited Tel: 020 7409
3494
Rory Murphy / Matthew Chandler
Arden Partners plc Tel: 020 7614
5900
Ruari McGirr (Corporate Finance)
Simon Johnson (Corporate Broking)
Citigate Dewe Rogerson Tel: 020 7638
9571
Ellen Wilton
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