Caspian's Subsidiary Wins Initial Court Case in Kazakhstan

Caspian Holdings has announced that the Specialized Regional Economic Court of Astana City, Kazakhstan has ruled in favour of Company's wholly owned subsidiary Taraz LLP in its recent court case with the judgement setting aside the order of the Minister of Energy and Mineral Resources. However, the judgement has been appealed by the Ministry of Energy and Mineral Resources and the Prosecutor. The appeal is scheduled for January 21, 2009. Caspian and Taraz LLP will strongly defend their contract rights and keep the market updated as they have further information available.

The judgement of the Specialized Regional Economic Court of Astana City, dated November 27, 2008, stated that:

"Based on the article 217221 of Civil Code of the Republic of Kazakhstan, the Court decided to satisfy the claim of Taraz LLP and recognize as illegal and cancel the Order of the Minister of Energy and Mineral Resources of the Republic of Kazakhstan No. 197 of July 23, 2008 "About the cancellation in unilaterally way of the Contract No. 385 dated December 14, 1999 for production of hydrocarbons on the oil field Zhengeldy, block ÕÕIV -13-F (partially) in Kysylkuginskij district, Atyrau region due to essential violations of obligations, provided by the Contract and by the Work Program -- and termination of the License AI No. 1533 (oil) of May 27, 1999 for the right for the subsoil use in the Republic of Kazakhstan"".

In summary the court judgment found that:

  • Taraz LLP exceeded its financial contract obligations;
  • There are no grounds to claim that field development was unsafe or not rational; and
  • The development plan of December 3-4, 2003 remains effective.

A further announcement of the outcome of the appeal will be made in due course.