Ascent Resources plc has secured after the event (ATE) insurance in relation to the €656.5 million Energy Charter Treaty damages claim over gas exploration against the Republic of Slovenia.
PRE-EMPTIVE ACTION
The company began its action after delays to and a dispute over the joint venture project within the Petišovci concession area.
An ATE insurance policy is expected to provide cover against “the majority, if not all,” of an award to pay adverse legal costs and disbursements should the claim be unsuccessful.
The policy also has the potential to provide a highly effective mechanism by which parties involved in arbitration can manage their financial risk, said Ascent.
“The company has secured this policy following the filing of its memorial and supporting evidence in July and as a pre-emptive action to secure proof of ability to pay adverse costs ahead of the respondent potentially requesting the claimants to do so.
“The upfront portion of the premium payable on the policy is financed via the damages-based agreement to appoint Enyo Law LLP , which has been modified to allow the insurer to receive a deferred contingent premium (calculated as a percentage of the notional amount that the policy covers) which is payable out of the damages received in the event of a successful claim.
Ascent repeated its warning that if its claim is successful, any amount received may be “significantly” lower than the full claim.