Curtis-Kazakhstan e-mails hacked by unknowns

Douglas Thomson • Wednesday, 18 March 2015 (7 months ago)

Over a dozen privileged and confidential e-mails between Curtis Mallet-Prevost Colt & Mosle and its longstanding client Kazakhstan have been leaked online, after the government’s computer network was hacked.

While the e-mails published so far do not concern Curtis’s representation of Kazakhstan in pending international arbitrations, there is concern that further communications have been hacked from the government’s system and could be leaked.

Kazakhstan has applied to the US District Court for the Southern District of New York for an ex parte restraining order and preliminary injunction against the unknown hackers, who were referred to in the application as “Does 1-100” (John Doe or Jane Doe being the standard placeholder name for parties whose names are unknown or must be withheld in US legal proceedings).

In the application, Curtis partner Jacques Semmelman says Kazakhstan is concerned about the “irreparable harm” to Kazakhstan’s interests that would arise through the release of further correspondence.

He proposes that any order issued by the court be posted as a comment on the Facebook pages hosting the leaked information, and placed as an advert in two of Kazakhstan’s leading newspapers on a daily basis over the course of a month.

The 14 e-mails published online so far have surfaced in a number of locations, including on Facebook and Kazakh opposition party websites. As well as Kazakh Ministry of Justice officials and Curtis lawyers, some of the communications involve Madrid law firm Gomez Acebo-Pombo, which also acts for the state.

Dating back to 2013, the e-mails concern Kazakhstan’s efforts to extradite from Spain Alexandr Pavlov, the former head of security and bodyguard for fugitive Kazakh banker and politician Mukhtar Ablyazov.

Ablyazov is currently in custody in France having been accused of embezzling billions of dollars from Kazakhstan's BTA Bank between 2000 and 2009 and of involvement in a terror plot.

In 2009, before the accusations of embezzlement were made against him, he sued Kazakhstan at ICSID through a Dutch subsidiary of his company KT Asia, claiming that the state’s purchase of majority shares in BTA Bank amounted to a nationalisation in breach of the Netherlands-Kazakhstan bilateral investment treaty.

His US$1.5 billion claim was dismissed on jurisdictional grounds in 2013 after an arbitral tribunal chaired by Gabrielle Kaufmann-Kohler ruled that KT Asia had not made a qualifying investment with risk in the bank. That ruling is now the subject of an annulment proceeding.

Kazakhstan is seeking the extradition of Pavlov to face his own charges of terrorism and misappropriation of funds.

Both Curtis and Gomez Acebo-Pombo have been advising the state on its extradition efforts, which are being resisted by the bodyguard and groups such as Amnesty International. Spain’s foreign ministry initially allowed the extradition but the decision was overturned by a court and he is now free on bail.

Curtis did not act as counsel to Kazakhstan in the KT Asia claim – the state was instead represented by London firm Reed Smith. It has, however, been instructed by Kazakhstan in over a dozen cases, recently defending it against poultry farmer Ruby Roz’s US$283 million UNCITRAL claim and oil company Caratube Asia’s US$1 billion ICSID claim. Both were dismissed on jurisdictional grounds.

The firm also advised the central Asian state in a dispute with a consortium of energy companies led by Britain’s BG Group and Italy’s Eni over the development of the Kashagan oil field in the Caspian Sea. The dispute settled in 2011 when the consortium, represented by Freshfields Bruckhaus Deringer, sold Kazakhstan’s state-owned oil company KazMunayGas a 10 per cent stake in another oil field, the Karachaganak field in northwest Kazakhstan near the border with Russia.

Curtis has an office in the Kazakh capital, Astana, and in the country's main city Almaty. While it was not the firm’s network that was hacked in this case, the development comes at a time when firms are increasingly taking steps to improve their cybersecurity. In the past fortnight it has emerged that a number of firms, including GAR 100 firms Debevoise & Plimpton, Allen & Overy and Linklaters, are forming a “cybersecurity alliance” that will share information about threats.

It is not the first time privileged e-mails from law firms have been intercepted. In 2008, an ICSID arbitral tribunal considered an allegation by Libananco, a Cypriot entity controlled by one of Turkey’s most prominent families, the Uzans, that Turkey had been intercepting its e-mails with its lawyers. Libananco said this made a fair proceeding impossible.

Turkey accepted that the surveillance had taken place but said it was part of a legitimate criminal investigation into a bank fraud. The tribunal did not impose any penalty but ordered that there should be no future tampering with communications relating to the arbitration.

More recently, Australia has been accused of interfering with privileged communications between East Timor and its legal advisers relating to an International Court of Justice case between the two states over oil and gas reserves in the Timor Sea.

Curtis arbitration partners did not respond to requests for comment.

Kazakhstan v Does 1-100 Inclusive

Counsel to Kazakhstan