13 July 2023

Rockhopper Exploration plc
(“Rockhopper” or the “Company”)

Update on Arbitration

Stay of enforcement to be lifted once Rockhopper put in place relevant escrow arrangements

Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin, provides the following update on its International Centre for Settlement of Investment Disputes (“ICSID”) arbitration with the Republic of Italy.

As announced on 24 August 2022, the arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty (the “Award”) entitling Rockhopper to compensation of €190 million plus interest at EURIBOR + 4%, compounded annually from 29 January 2016 until time of payment (except the four-month period immediately following the date of the Award).

On 28 October 2022, Italy submitted an application to the ICSID seeking to annul the Award under Article 52 of the ICSID Convention. Italy also requested a provisional stay of the enforcement of the Award pursuant to Article 52(5) of the ICSID Convention. The provisional stay prevented Rockhopper from taking legal action to enforce the Award in any jurisdiction.

Following a hearing on 6 March 2023, the ad hoc committee (the “Committee”) convened by ICSID to rule on the annulment issued the following orders with regard to the provisional stay of enforcement:

1: that Italy and Rockhopper (together the “Parties”) shall confer – in good faith and using their best efforts to cooperate and find an effective arrangement – for the mitigation of the risk of non-recoupment using a first-class international bank outside the European Union (or as Italy and Rockhopper otherwise agree) to be put into place in anticipation of the termination of the provisional stay of enforcement of the Award.  This is to mitigate the perceived risk that, in the event the Award is annulled, Italy may not be able to recover Italian assets seized or frozen by Rockhopper (before the ad hoc Committee issues its decision on annulment) in court enforcement proceedings.

2: that Rockhopper shall, within 30 days of the date of the decision, apprise the Committee of arrangements agreed with Italy for the mitigation of the risk of non-recoupment or that negotiations have failed and, in the latter event, propose concrete arrangements in accordance with the decision for the mitigation of the risk of non-recoupment. Italy may then briefly comment on Rockhopper’s proposal within 10 days, constructively highlighting any areas of disagreement between the Parties.

In line with the preceding orders and following failure to agree arrangements with Italy, Rockhopper submitted its proposed arrangements (the “Escrow Arrangements”) to mitigate the risk of non-recoupment on the 24 May 2023. On the 5 June 2023 Italy submitted its comments on the Escrow Arrangements.

On the 12 June 2023, the Committee informed the Parties that, subject to allowing an additional opportunity for the Parties to comment, it intended, subject to Rockhopper implementing the Escrow Arrangements, to lift the Stay of Enforcement.

On the 11 July 2023, and having received additional comments from the Parties the Committee issued the following orders with regard to the provisional stay of enforcement:

1: That the provisional stay of enforcement shall terminate 5 business days following the provision by Rockhopper to Italy of documentation that escrow arrangements in the form proposed have been established, provided that Italy does not within those 5 business days submit a reasoned written objection in these annulment proceedings that the escrow arrangements established are not in accordance with the proposed arrangements.

2: Reserves its right to revisit its decision at any time; and

3: Reserves its decision on costs

The decision to lift the provisional stay of enforcement is unrelated to the merits of Italy’s annulment request. A final hearing in relation to Italy’s request to annul the Award is scheduled to take place in Q1 2024.  Guidance given by Rockhopper in the Company’s 31 October 2022 announcement that the entire annulment process is likely to take 18-24 months from that date remains in place. Rockhopper is currently paying all legal costs associated with the annulment.

Sam Moody, Chief Executive of Rockhopper Exploration, commented: “We welcome the approach adopted by the ad hoc Committee and believe this outcome will allow us to commence enforcement with no risk to Italy of non-recoupment pending the outcome of the annulment.”


Rockhopper Exploration plc
Sam Moody – Chief Executive Officer
Tel. +44 (0) 20 7390 0234 (via Vigo Consulting)

Canaccord Genuity Limited (NOMAD and Joint Broker)
Henry Fitzgerald-O’Connor/Gordon Hamilton
Tel. +44 (0) 20 7523 8000

Peel Hunt LLP (Joint Broker)

Richard Crichton/Georgia Langoulant
Tel. +44 (0) 20 7418 8900

Vigo Consulting
Patrick d’Ancona/Ben Simons/Fiona Hetherington
Tel. +44 (0) 20 7390 0234