Zenith Energy Ltd (LSE:ZEN, TSX-V:ZEE) said on Wednesday that it is taking Tunisia’s state-owned petroleum enterprise to the International Chamber of Commerce in an arbitration case.
The London Stock Exchange-listed company’s share price got a short-lived boost this morning, climbing to a high of 3.45p, up from 3p shortly after the markets opened, before settling just above that benchmark by the afternoon.
The company, which has oil and gas production and exploration activities in Africa and Italy, said it has initiated an arbitration case against the Republic of Tunisia’s national oil company, Entreprise Tunisienne d'Activités Pétrolières (ETAP), in Paris.
In July, it obtained a “conservative seizure” for approximately US$6.5 million deposited in a bank account under the national Tunisian oil company’s name, according to a statement issued on Wednesday.
The money was seized after the state oil company allegedly failed to “pay for oil produced and sold” by one of Zenith’s subsidiaries, the company said.
Zenith first announced that it had lodged a separate arbitration proceeding against the Republic of Tunisia in the International Centre for Settlement of Investment Disputes in Washington DC in June.
Zenith’s Chief Executive Officer Andrea Cattaneo said: "It is deeply regrettable that Zenith Energy has been compelled to initiate a second arbitration and conduct conservative seizures against ETAP following failures to satisfy contractually binding payments for oil production.
“Shareholders can take comfort in the decisive action the Board has taken to ensure that Zenith's interests are upheld."