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Kumtor developments: Court denies motion for appeal as of right of Kyrgyzstan

Senior Judge of the United States District Court for the Southern District of New York Alvin K. Hellerstein denied the motion of the Kyrgyz Republic to appeal the order entered by the Bankruptcy Court of the Southern District of New York on July 20, 2021, finding the republic in contempt of violating the court’s automatic worldwide stay under 11 U.S.C. § 362(a) and ordering it to pay the attorney’s fees of Kumtor Gold Company CJSC and Kumtor Operating Company CJSC — Centerra Gold Inc. subsidiaries — as sanction. The court order says.

As the document says, the Kyrgyz Republic moved to appeal as of right, with leave of the court, or in the alternative, directly to the Second Circuit, arguing that the Bankruptcy Court rejected the republic’s claims of sovereign immunity under the Foreign Sovereign Immunities Act.

According to the order, the Kyrgyz Republic’s motion was denied because the party was unable to meet the criteria for justifying the appeal.

In the opinion of Alvin Hellerstein, the question presented by Kyrgyzstan does not meet any of the requirements, justifying direct appeal to the Second Circuit and the direct appeal to Second Circuit will not materially advance the termination of the Adversary Proceeding or the Chapter 11 Cases.

Kumtor Gold Company, the Centerra subsidiary that operated the gold mine before the government seized it, filed for Chapter 11 bankruptcy protection in New York court in June, just days after mine operations were taken over by Kyrgyz government-appointed managers.

Last month, Judge Beckerman denied a motion from Kumtor Gold Company seeking $1 million per day in sanctions against the Kyrgyz government for its actions in adopting laws concerning the corporate ownership of the mine and making statements about the status of future contracts between the government and Kumtor Gold Company.

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