Monday, October 29, 2018

ExxonMobil's US$1.4 billion claim against Venezuela: ICSID panel member Cecil Abraham's appearance of bias may be grounds for successful appeal.

by Ganesh Sahathevan

Image result for exxon


This writer has previously noted of that prominent Malaysian jurist, Tan Sri Cecil Abraham:

Cecil is often in the news.Sarawak Report has the most recent report:
Murder Cover-Up Case Nets Najib, Rosmah and Lawyers Cecil Abraham & Shafee Abdullah

Having said that, Cecil has also been featured on the Global Arbitration Review new-site:

Cecil Abraham has been active on various International Centre for Settlement of Investment Disputes (ICSID) annulment committees in cases against Venezuela. He sat on panels that chopped US$1.4 billion from an award in favour of ExxonMobil; reduced an award in favour of oil services company Tidewater by US$10 million; and upheld the dismissal of a US$150 million claim concerning a fertiliser expropriation.

ExxonMobil has  appealed and on 26 October 2018 Global Arbitration Review reported:

ExxonMobil has resubmitted a claim against Venezuela to ICSID, after an annulment committee dramatically slashed US$1.4 billion from an award the oil group secured in 2014, concluding that the original tribunal had exceeded its powers.

However, tribunal member Cecil Abraham's entanglement with ex-PM Najib does bring him into the orbit of the 1MDB mess.Indeed, it was Cecil who so brilliantly put that highly creative, winning argument that Najib was not a public officer, in an 1MDB related matter brought by new PM Mahathir Mohamad.

Being entangled with Najib, it is now open to ExxonMobil to challenge the ICSID's  decision in favour of Venezuela on the additional grounds of Cecil's  appearance of bias, for Venezuela and Malaysia are linked by PetroSaudi, a company which is being sued by Venezuela for the recovery of millions of dollars lost 

in an oil services deal, which PetroSaudi financed out of  money  stolen from 1MDB. Malaysia and Najib did not need the complication of a massive decision against Venezuela , and had every reason to see that Venezuela kept whatever little money that socialist paradise turned nightmare retained in its treasury.That gives rise to an appearance of bias, and it  is probably sufficient to throw out Cecil's ICSID decision in favour Venezuela.



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Venezuela Issues Criminal Prosecution Against Ex-Oil Minister Over PetroSaudi Contract....

Venezuela Issues Criminal Prosecution Against Ex-Oil Minister Over PetroSaudi Contract....

There has been a dramatic development in the on-going row between Venezuela and PetroSaudi over the off-shore oil contract that was funded by the 1MDB investment in the Saudi-owned company.
Late last week, the country’s top prosecutor issued criminal proceedings and applied for an international arrest warrant for the former powerful Petroleum Minister, Rafael Ramirez, for the “crimes of intentional embezzlement, money laundering and association”, specifically referring to the so-called “ghost ship” contract with PetroSaudi.
“Ramírez you have to answer to justice for this case, for the case of factor K, and the scrap ship Saturn belonging to the ghost company Petrosaudi,” The chief prosecutor  Tarek William Saab is reported as having demanded.
During a press conference, the prosecutor announced that they will request an arrest warrant, as well as Interpol’s red alert, against the former oil minister, Rafael Ramírez, for the “crimes of intentional embezzlement, money laundering and association.”Saab assured that Ramírez is involved in the case that they qualified as “the ghost ship”, making reference to the “vessel for offshore gas exploitation Petro Saudi Saturn”. He recalled that “the boat was rented in a closed contract for seven years, of which although 60% of the time it was inoperative. By the time it was stopped, a total of US$1,175,000 million 300 thousand dollars had been paid in rental costs, even though the boat did not work. The former president of PDVSA is linked to the case of the Office of Marketing Intelligence and Petroleum Policy, based in Vienna. [Translation]
According to the prosecutors the money lost through PetroSaudi was part of US$11 billion stolen from the state oil company PDVSA, of which Ramirez was also head, during his tenure.  Prosecutors say this was down to corruption, however Ramirez, who has fled the country and is believed to be hiding in the United States, is putting the matter down to his political rivalry with the current President Maduro.
Venezuela has put out a request to Interpol and is believed to be waiting on their response.  Meanwhile, the court filings of the US Dept of Justice made clear last year that none of the profits accrued by PetroSaudi from this unequal deal were returned to 1MDB, which had put in the original investment as part of an alleged joint venture and then series of loan arrangements to the company.
Likewise it has emerged that the two dud drill ships owned by PetroSaudi were the sole assets on which 1MDB’s alleged $2.3 billion Cayman Island investment portfolio was based, thanks to criminal over-valuations procured on behalf of the Malaysian fund by Najib’s advisor Jho Low and a ring of collaborators based at BSI Bank (now closed following investigations into the scandal in Switzerland and Singapore).
With a court battle now underway the full details of the once secretive dealings between PetroSaudi and Ramirez’s team at PDVSA are likely to be laid bare in open court, which should provide even more details for Malaysians about where all their money went.
After all, Prime Minister Najib Razak continues to maintain there was “no wrong-doing”, 1MDB still claims it cashed out from the deal with a $2.3 billion sale of its interest and PetroSaudi has claimed that documents used by Sarawak Report to expose the thefts of hundreds of millions of dollars from 1MDB were ‘doctored’ and forged.

Tuesday, October 23, 2018

China reaches into Malaysia,ASEAN to build defence ties while Australia ignores Mahathir's attempts to containChina-Is the Anwar obsession , Mahathir hatred,getting in the way?

by Ganesh Sahathevan
Australia has shown little interest in backing Mahathir as he pushes back against China,despite the Five Nation Defence Pact:

Prime Minister Tun Dr Mahathir Mohamad today brushed off China’s “sovereign claim” over a disputed chain of islands in the South China Sea, stating the country has the right to go “wherever they wanted to”. However Dr Mahathir further explained to British national broadcaster BBC that Malaysia’s policy is not to have battleships and warships in the South China Sea as tensions in the region will escalate into armed conflict and subsequently war if vessels are stationed in the area.

“I explained that China has the right to go wherever they want to go but please don’t check on ships or prevent ships on passing through the straits of Malacca and the South China Sea, that is all we want,” he told HARDtalk programme host Zeinab Badawi.

Meanwhile China is doing all it can to build a new defence pact with Malaysia, and other ASEAN countries:

RT Echinanews " and launch maritime drill in Zhanjiang. The joint drill is the first of its kind held between China and ASEAN countries. "

Saturday, October 13, 2018

Is l'affaire Adelaide a repeat of DCNS's l'affaire Karachi-Australian taxpayers have not been told why French subs will cost 5 times more

by Ganesh Sahathevan

First for context and references see:

DCNS's Philippe Japiot charged with corruption, spent much time in Australia before the award of the Australian AUD 50 Billion contract

What did DCNS (aka Naval Group) do with information on Ray Grigg's affair: L'Affarire Adelaide deepens

Then some recent reporting on escalating costs:

The AFR reported in May 2018:
Taxpayers will spend $100 billion to build and operate the new fleet of submarines, Defence Department officials have revealed for the first time as they also fended off warnings the naval shipbuilding program was at risk of cost blowouts and delays.

The Australian's reported on 2 October 2018:

It’s only when you look at how the original deal was done that you realise why the capital costs have risen from $50bn to $90bn (before it starts) and that add-ons take the total outlay to $220bn-plus over several decades.

And worse still, thanks to the research work of leading physicist Aidan Morrison and questions by Senator Rex Patrick and others, we now know there are grave doubts about the technology behind the submarine, which looks like a $220bn white elephant. Significantly, the French are shifting their ground on the technology.

And finally,against the backdrop of escalating costs ,this report ,where costs seem to be an irrelevant consideration:

Future submarine project deadlocked as French shipbuilder digs in on $50 billion contract

Updated 28 Sep 2018, 12:52pm
The Government has grown so frustrated with the French company selected to build Australia's next fleet of submarines that Defence Minister Christopher Pyne refused to meet top officials visiting the country this week.
Naval Group was selected in 2016 to build 12 submarines for the Australian Navy, in the country's largest-ever defence contract worth $50 billion.
The ABC understands Mr Pyne will only meet the chief executive of the majority French state-owned company once a crucial document, the strategic partnering agreement (SPA), has been signed.
Negotiations on that document have stalled and it is feared they may not be resolved before next year's federal election.
Defence and industry figures have told the ABC that France and Australia will not be ready before 2019 to sign the document, which is needed before detailed design contracts can be finalised, and submarine construction begins.
Sources familiar with the process say a goal to sign the vital SPA during a visit to Adelaide this week by French Minister Florence Parly has slipped off course, with fundamental differences that may not be reconciled before early next year.
Concerns over warranties and technology transfer are believed to be the main sticking points in the tough negotiations between the Australian Commonwealth and French-owned Naval Group.
The knock-on effects of delay on the SPA, which covers the guiding terms and conditions that govern the submarine program, and the likelihood of a federal election being called in the first quarter of next year threatens to create a "perfect storm" of uncertainty, with some risk that it could ultimately sink the French project entirely.
Ms Parly was accompanied to Australia this week by Naval Group chief executive Herve Guillou and project boss Jean-Michel Billig, but scheduled meetings between the two company representatives and Mr Pyne and Defence Industry Minister Steven Ciobo were cancelled.
Naval Group has declined to say whether it is disappointed that Mr Pyne refused to meet them, but has conceded the negotiations with Australia are "challenging" and "complex".
"Negotiation of the SPA is continuing to ensure we implement an equitable and enduring agreement to deliver the Future Submarine capability over the next 30 years," Naval Group said in a statement.
"Naval Group continues to enjoy a strong and collaborative relationship with the Commonwealth."
Another round of talks between Naval Group and the Defence Department has been scheduled for October in Canberra, but even if a broad agreement emerges next month, a finalised SPA document is unlikely to be signed before Christmas.
Federal Opposition figures have signalled that if the SPA is not completed by next year's election, Labor could order a review of the project if it wins office.
Asked today whether the agreement would be signed before the next election, Prime Minister Scott Morrison said the Government was working to the timetable that had been set out.
"The timetable for that has already been set out and we're working to that timetable," he said.
The ABC has contacted Mr Pyne for comment.
First posted 28 Sep 2018, 5:02am

$100 billion babies: Defence reveals true cost of new submarines for taxpayers

Naval Group has been contracted to build 12 new submarines for Australia in a $50 billion program.
Naval Group has been contracted to build 12 new submarines for Australia in a $50 billion program. Naval Group

Taxpayers will spend $100 billion to build and operate the new fleet of submarines, Defence Department officials have revealed for the first time as they also fended off warnings the naval shipbuilding program was at risk of cost blowouts and delays.
While the $50 billion budget to build the 12 French-designed submarines in Adelaide has been known for several years, Rear Admiral Greg Sammut told Senate estimates on Tuesday the same amount again would be spent on sustaining the submarines throughout their operating life, although he conceded the costs were yet to be finalised. 
"Many of the detailed costs of acquisition and sustainment will be determined during the design process through choices made but at this point early estimation of the sustainment costs for the fleet are of the order of up to $50 billion on a constant price basis," he said in response to questions from Centre Alliance Senator Rex Patrick. 
Construction of the first submarine is scheduled to start by 2022 and it will enter service in the early 2030s, with the last submarine to be retired by 2080.
In comparison, the six Collins class submarines currently cost $600 million a year in sustainment costs.
Senator Patrick later told The Australian Financial Review he was concerned the government had underestimated the cost of sustaining the new submarines, with naval sustainment costs generally between two and three times the acquisition cost. For example, the government has budgeted between $7 billion and $11 billion to sustain the offshore patrol vessels, which will cost $2.8 billion to build.
"It's disturbing that Defence has done this," he said.
"The variations being talked about here make the corporate tax cut revenue impacts look like pocket change. This issue needs a lot more scrutiny." 

'Significant changes' to program

Officials also disputed key findings of an auditor-general's report this month that highlighted the "high to extreme risks" in establishing a continuous shipbuilding industry in Australia.
Deputy secretary Kim Gillis, who oversees Defence's Capability, Acquisition and Sustainment Group, suggested some of the report was outdated because Defence had implemented a number of measures to mitigate risks of building warships and submarines in Australia. He said the report had been misinterpreted by some commentators.
"At no stage has Defence not been providing robust advice to government. You can see the significant changes that have occurred over the last two years as we have developed this program," Mr Gillis said.
Outgoing Chief of Defence Force Mark Binskin told estimates the navy would soon be deployed to the south-west Pacific in a goodwill mission with neighbouring countries amid concerns over China is using aid and infrastructure projects to gain regional influence.
Air Chief Marshal Binskin said four ships and 1000 personnel would take part in this year's iteration of its annual Indo-Pacific Endeavour exercise.
"The 13 week deployment will focus on the south-west Pacific, with an emphasis on planning for disaster assistance, multinational naval manoeuvres and training activities with partner nations," he said.

Helping the Philippines

Air Chief Marshal Binskin also said Australia had 180 army, navy and air force personnel deployed to the Philippines to help with counter-terrorism training and maritimes patrols, a much deeper level of commitment than previously revealed.
An initial 80 personnel were deployed midway through last year to help Filipino forces fight a local offshoot of Islamic State in the southern Philippines, but since the defeat of the insurgency in October, Australian personnel had participated in almost 3000 "peer-to-peer" activities such as training and patrols, including deploying two patrol vessels to the Philippines.
Defence Department Secretary Greg Moriarty said Australia's contribution to the Philippines cost $39.1 million in 2017-18.
Vice Chief of the Defence Force Ray Griggs confirmed a RAAF aircraft was continuing surveillance flights as part of enforcing sanctions against North Korea amid confusion over whether the summit between US President Donald Trump and North Korean dictator Kim Jong-un would go ahead.