Opinion ID: 785472
Heading Depth: 3
Heading Rank: 2

Heading: The Concordat

Text: 15 In June 1997, one month after the arbitrators issued the Phase I Award, Noga obtained from the Court of Justice of the Republic and State of Geneva a stay of any attempt to place Noga into bankruptcy, so that Noga could propose a composition plan (similar to an American Chapter 11 reorganization plan) to its creditors. The Swiss court subsequently approved Noga's plan, referred to as a Concordat. Under the terms of the Concordat, Noga was permitted to discharge its debts incurred prior to June 1997 (other than debts owed to certain preferred creditors, including the Assignee Banks) by paying a dividend equal to about twelve percent of the accepted value of its creditors' claims. 5 16 In the Concordat, the Assignee Banks agreed to receive their portions of Noga's collection of its arbitration claims subject to certain conditions. First, Noga would pursue, in its own name, both for itself and for the Assignee Banks, all steps necessary to obtain: (i) payment of the Phase I Award; (ii) acknowledgment by the Russian Federation of the remaining balance owed to Noga; and (iii) payment of that balance through arbitral proceedings, judicial proceedings, enforcement proceedings, or amicable negotiations. Second, Noga agreed to keep the Assignee Banks informed regarding its attempts to obtain these payments and the results of those attempts, and to consider the Assignee Banks' advice, recommendations, and suggestions. Finally, the Assignee Banks reserved the right to enforce directly against the Russian Federation their assigned portions of Noga's claim, following notice to Noga. To date, none of the Assignee Banks has exercised this right. 17 The Concordat also established the following priority for application of any payment of Noga's arbitration claims: (i) full payment of the arbitration costs and/or collection of those costs (as defined in a Swiss court judgment); (ii) payments to the Assignee Banks according to the terms of their assignment agreements; (iii) a refund to one Jean Rouch of funds advanced to Noga for payment of its expenses during the moratorium and his payments to creditors in the first and second classes, if any, and to creditors in the third class; 6 and (iv) the balance to Noga.