Hogan Lovells claims Frontera’s accusations against the Georgian side to be baseless

31 January, 2020
Hogan Lovells represents Georgian Oil and Gas Corporation ("GOGC") and the State Agency for Oil and Gas in arbitration proceedings arising from and relating to breaches by Frontera Resources Georgia Corporation of its obligations under its 1997 Production Sharing Agreement ("PSA") with those entities. Various material breaches of the PSA have been asserted over time, and those issues are required by the PSA to be resolved by arbitration before an impartial international arbitration tribunal following international rules.

GOGC and the State Agency followed the contractually bargained-for dispute resolution procedure in the PSA, by initiating arbitration proceedings before an international tribunal appointed under and in accordance with the PSA and international law (the "Tribunal"). The hearings on that matter were conducted in London in December and are concluded; the parties await the Tribunal's decision. GOGC and the State Agency have committed to respect, honor and abide by whatever award is issued by the Tribunal. Consistent with this clear respect for the rule of law, GOGC and the State Agency have refrained from initiating action to interfere with Frontera's continued exercise of rights in the disputed territory, even though GOGC and the State Agency believe Frontera is without rights in that regard.

The issues in dispute form a standard, customary commercial dispute, and the Georgian entities involved have acted properly in invoking contractual remedies and disputes procedures. There is simply no basis to claim otherwise. Nonetheless, Frontera has, without justification or factual basis, asserted otherwise and attempted without factual basis to place blame upon the Georgian parties with which it has dealt.

Frontera has sought repeatedly to delay and impede arbitration proceedings in various ways, with the result that they have been protracted. However, GOGC and the State Agency have adhered to their respect for the contractual requirements and the rule of law.

We would be happy to provide additional information as appropriate.

Very truly yours,

David Dunn