KAZAKHSTAN SUPREME COURT ATTEMPTS TO EXPROPRIATE ASSETS WORTH OVER USD 400 MILLION FROM TRANS-WORLD GROUP NEGATIVE PRECEDENT FOR WESTERN INVESTMENT IN THE REGION LONDON, Feb. 17 /PRNewswire-AsiaNet/ -- The Supreme Court of the Republic of Kazakhstan has confirmed a 27 January ruling against companies associated or affiliated with Trans-World Group,a global conglomerate in metals trading and commodities, and one of the largest Western investors in Kazakhstan. The ruling attempts to invalidate over USD 200 million in existing trade contracts and loans and orders several Trans-World Group companies to pay an additional USD 200 million in punitive damages, based on spurious charges that Trans-World mismanaged the plants and forced a situation of "economic dependency". The Kazakhstani Court will enforce the order with the immediate transfer of Trans-World's interests to local plants controlled by Trans-World's former joint venture partners in Kazakhstan, the Chodiev Group and that group's management company the Kazakhstan Mineral Resources Corporation (KMRC). The ruling comes at a time when Kazakhstan is seeking greater integration into the global economy and is wrestling with developing ailing post-Soviet industries and infrastructure. Trans-World invested an estimated USD 750 million in four major metals and energy producing plants in Kazakhstan between 1994-1997 to refurbish and modernize the former Soviet republic's metals industry. Trans-World has refused to submit to the Kazakhstani Court, which does not have legal jurisdiction over the venture, and protested the highly irregular nature of the proceedings and absence of due legal process. The court has ignored official international arbitration clauses vesting jurisdiction of disputes between the former partners with international arbitration tribunals, whose awards are enforceable under the New York Convention. Commenting on the ruling, Mr. Alan Bekhor, Managing Director ofTrans-World's trading and distribution base in the United Kingdom,said: "We are amazed that the highest court of Kazakhstan has presided over a process which so blatantly ignores the ruling of foreign courts, sanctity of contract and existing shareholding agreements." Mr. Bekhor added: "This is a tragic move for Kazakhstan. Parochial and mid-level interests continue to undermine President Nazarbayev's efforts to develop Kazakhstan's economy outside the fossil fuel sector." He added, "Trans-World remains proud of its work in the region and left the plants in a significantly stronger economic and financial condition." Characterising the legal process, Mr. Charles Manduca, a partner in Lovell White Durrant, in London, and external legal counsel for Trans-World Group, said: "This ruling is the latest in a series of steps taken in Kazakhstan which amount to the attempted expropriation of the assets of Trans-World as a foreign investor which has invested very considerable sums of money in Kazakhstan." Trans-World is claiming substantial damages and restitution in proceedings in Western courts against their former joint venture partners in Kazakhstan for their breach of the joint venture arrangements. Arbitrations have been commenced in London. Potential losses in Kazakhstan will not disrupt Trans-World's global operations. Trans-World Group is a privately-owned diversified global conglomerate and one of the world's largest trading operations in ferrous and non-ferrous metals industries and other commodities with USD 7 billion in annual turnover. SOURCE Trans-World Group CONTACT: Alan Bekhor, 44-171-972-0380, or James Viciana, 212-370-6900, both of Trans-World Group