Matra Petroleum plc has been notified that a previous 50% shareholder in "OOO" Arkhangelovskoe, Kompania Gaz i Neft, has instigated legal proceedings against Matra Petroleum plc and its subsidiary Matra Cyprus Petroleum Limited in Russia.
"OOO" Arkhangelovskoe was acquired by Matra during April 2007 and holds the Company's Russian assets, specifically the Arkhangelovskoe exploration license in Orenburg.
Kompania Gaz i Neft's claim is that the company "OOO" Arkhangelovskoe was not formed in full compliance with Russian Federation laws due to a non-compliance issue on their own part and that the company should be reregistered under its original ownership. They further seek to have the acquisition of "OOO" Arkhangelovskoe by Matra nullified.
Full compliance with Russian Federation law was warranted by the management and owners of Kompania Gaz i Neft within the acquisition agreement, being an agreement subject to English Law.
In accordance with the provisions of the acquisition agreement Matra has moved that the matter be referred to the London Court of International Arbitration.
The Moscow Regional Court hearing is set for July 9, 2008.
Having consulted with the Company's legal advisers the Directors of Matra believe that the Company will prevail in the Russian courts and any arbitration, which may subsequently take place.
Under the terms of the acquisition agreement Matra issued 55,000,000 fully paid Matra ordinary shares in return for the 90% of "OOO" Arkhangelovskoe it did not then hold. This included the 50% interest from Gaz i Neft.
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