REG - Zenith Energy Ltd - Outcome of ICC-2 & Application for Annulment

Zenith EnergyAnnouncement

Wed 18:30

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RNS Number : 3838R  Zenith Energy Ltd  16 July 2025

July 16, 2025

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Outcome of ICC-2 & Application for Annulment

Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE: ZENA; OTC
PINK: ZENAF), the listed international energy production and development
company, announces that its wholly owned subsidiary, Canadian North Africa Oil
and Gas Limited ("CNAOG"), has received the decision of the Arbitral Tribunal
in respect of the ICC-2 Arbitration regarding the Sidi El Kilani concession
("SLK Concession") against the Republic of Tunisia ("ICC-2 ").

Decision

The Arbitral Tribunal has issued a decision rejecting the entirety of the
claims presented by CNAOG.

Application for Annulment

Under the rules of the ICC, a party may apply for annulment of an arbitral
award for, inter alia, cases of procedural irregularities.

The Company confirms that its legal counsel identified and documented several
serious procedural irregularities during ICC-2.

Following legal advice, the Company will now proceed with an application for
annulment of the ICC-2 award before the Swiss Federal Supreme Court in
Lausanne, Switzerland.

The Swiss Federal Supreme Court usually renders decisions on annulment
applications within 6 to 9 months from submission.

Background

CNAOG initiated the ICC-2 against the Republic of Tunisia, as announced
in December 2023, following a series of arbitrary actions and obstructions
undertaken by the Republic of Tunisia, leading to the arbitrary termination of
the SLK concession.

Inter alia, these included:

·      CNAOG's lost production revenue and associated profitability,
during a period of high energy prices, from the SLK Concession until its
initial expiry in December 2022.

·      The volume of crude oil produced from the SLK Concession and
allocated to and received by CNAOG upon the completion of the acquisition.

·      The value of the 45% interest in the renewal of the SLK
Concession, representing a breach of CNAOG's right to renew its previously
existing 22.5% interest in SLK, as well as the 22.5% interest held by Kuwait
Foreign Petroleum Exploration Company, which relinquished its interest in the
SLK Concession before its initial expiry.

CNAOG filed claims in the amount of approximately US$130 million following
calculations made by third-party experts.

Andrea Cattaneo, Chief Executive Officer of Zenith, commented:

"We are outraged by the decision rendered by the Arbitral Tribunal in ICC-2.

Our position has always been - and remains - that CNAOG is entitled to
substantial compensation with respect to the SLK concession. The failure to
recognize the illegitimate conduct of the Tunisian authorities, following the
favourable precedent set in ICC-1, is nothing short of a travesty.

Acting on the advice of Professor Thomas Clay, a globally recognized authority
in international arbitration, CNAOG had already expressed serious concerns
regarding the management of ICC-2. We identified and promptly documented
serious and repeated procedural irregularities during ICC-2. However, due to
the confidentiality provisions governing ICC-2, we were unable to disclose
these irregularities publicly until now.

The Company is now considering all legal avenues. CNAOG will, without delay,
file an application for annulment of the ICC-2 award before the Swiss Federal
Supreme Court. Should the annulment succeed, a new arbitration will be
initiated under a properly constituted and impartial tribunal.

CNAOG remains fully confident in the strength of its case and will continue to
fight vigorously to achieve justice. Our immediate focus now shifts to the
ICSID arbitration, where we are pursuing a US$503 million claim. The final
submission is scheduled for September 2025, ahead of the final hearing in Q2
2026. At the same time, we are taking all necessary measures to enforce the
ICC-1 award of approximately US$10 million.

This injustice only serves to strengthen our resolve. The Company will not
hesitate to explore every legal and procedural mechanism available to ensure
accountability and to vindicate its rights."

Clay Arbitration and Charles Russell Speechlys Paris, Zenith's legal counsel,
commented:

"After 32-months of proceedings, marked by numerous incidents that the
Arbitral Tribunal proved unable to resolve and equally unable to maintain
proper control over the proceedings, the Tribunal has issued a 70-page
arbitral award, with only 6 pages of reasoning, dismissing all claims
totalling US$130 million. This was done while refusing to apply the applicable
legal rules and contradicting a prior arbitral award.

The countless cases of procedural irregularities were systematically recorded
as formal objections, which will be invoked in the annulment proceedings to be
filed imminently."

 

Market Abuse Regulation (MAR) Disclosure

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of
this announcement via a Regulatory Information Service ("RIS"), this inside
information is now considered to be in the public domain.

 

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