Alberta court asserts jurisdiction in Russian case

Alberta’s Court of Queen’s Bench has asserted its jurisdiction in a dispute in which a Calgary-based oil and gas firm alleged its Russian operation was the victim of an aggressive takeover.
As a result of the takeover, the Calgary firm claimed losses of oilfield equipment.
In Norex Petroleum Limited v. Chubb Insurance Company of Canada, Zao Yugraneft Corporation is a joint venture, incorporated in Russia and engaged in the oil and gas business in that country.
In 1999, 60% of Yugraneft was owned by Norex, a Canadian-based company operating in Russia, and 40% by OJSC TNK-Nizhnevartovsk (TNK), a Russian corporation.
Norex had placed a property policy covering Yugraneft and its equipment with Ingosstrakh, a Russian insurer in the amount of US$11,764,900. Insurance coverage for Yugraneft’s oilfield equipment was also provided by Chubb.
Both Chubb and Ingosstrakh allege the Chubb policy was limited to differences in conditions and differences in limits, the court decision says.
TNK in 2001 successfully petitioned in Russia’s commercial courts to alter the proportionate shareholdings of the firm to 20% for Norex and 80% for TNK, alleging in the process that Norex’s contribution to the joint venture was invaluable.
A shareholders meeting was held, a vote to change the general direction of Yugraneft was made, and TNK successfully replaced the head of Yugraneft.
Ingosstrakh asserts in its statement of defence that as a result of the meeting, TNK “lawfully assumed management control of the Yugraneft facilities in Moscow and Nizhnervatovsk, including the installation of security personnel.”
Norex argues both it and Yugraneft were “the victims of a fraudulent and illegal scheme of corruption and conspiracy,” the court decision says.
Norex also alleges the takeover involved “thugs wearing military style fatigues and armed with machine guns” taking control of Yugraneft’s offices and oilfields.
Norex filed a statement of claim in Alberta’s court in which it makes an insurance claim for oilfield equipment lost during the “aggressive takeover,” alleging that the Russian courts are corrupt, and that key witnesses would be unable to travel to Russia for fear of personal safety.
After considering 10 factors, Alberta Court of Queen’s Bench Justice C.S. Brooker found that: “There is a real risk that Norex could be unable to obtain justice in this case from the Russian courts. That risk does not exist in the Alberta court, the court to which Ingosstrakh has already attorned.
“No litigant should have to run the risk that the court hearing the dispute might be corrupt,” he concluded. “Consequently, taking all of the factors into account, I conclude that Alberta is forum conveniens.”