Fanning's San Leon hit with €18m judgment, will appeal
Published 31/05/2015 | 02:30
Oisin Fanning's fracking company San Leon Energy has been hit with a €18m judgment by the International Court of Arbitration of the International Chamber of Commerce.
The company was brought to arbitration by Dutch investment company Avobone, from which San Leon subsidiary Aurelian Oil & Gas aimed to buy the final 10pc of a Polish asset that Aurelian already 90pc owned.
The dispute mainly relates to the repayment of a loan provided by Avobone to Aurelian to meet Avobone's share of drilling the asset. San Leon said it will appeal the ruling to the UK Commercial Court.
"San Leon contested these claims robustly at the hearing of the Court of Arbitration and believed it had a material advantage in the case," the company said in a statement released last week.
"Two-thirds of the main award relates to the repayment of a loan provided by Avobone to Aurelian.
"In Aurelian's view, this loan was a standard industry-practice mechanism that was used to fund Avobone's share of the drilling and other field-related costs in a tax-efficient manner, and should only have been repayable had Avobone exited after the field had generated sufficient cashflow to repay the loan.
"As of the timing of Avobone's exit in early 2013, the field had yet to generate cashflow. Following consultation with counsel, the company remains convinced that Avobone's case is substantially without merit...the company is thus filing an immediate appeal with the UK Commercial Court and will defend its position vigorously.
"The company understands that such an appeal would likely take at least nine months. The company will provide a further update in due course."
Fanning is the former chief executive of Smart Telecom, and also of Money Markets International (MMI) Stockbrokers, which went bust in 1999.
In 2013 he agreed to pay €8m to IBRC over a dispute based in part on a loan related to his luxury home.
San Leon has a 4.5pc net profit interest in the Barryroe field off the Cork coast, which is majority-owned by Tony O'Reilly Jr's Providence Resources. Earlier this week O'Reilly said Providence is working to complete its proposed farm-out deal on Barryroe - its flagship asset - this year.
San Leon also has assets in Albania, France, Morocco, Poland, Romania and Spain, and is listed on London's AIM market.
Sunday Indo Business