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August 21, 2006

Supreme Court rebuff for Stolt-Nielsen

Stolt-Nielsen (NASDAQ:SNSA) (Oslo:SNI.OL) says that the Supreme Court of the United States has denied a renewed application originally submitted to Justice John Paul Stevens that would have kept in place an injunction by a federal district court preventing the Department of Justice's Antitrust Division from bringing charges against the company.

The injunction was issued in January 2005 by the federal district court in Philadelphia and precluded criminal prosecution of the company or its executives based on the validity of the amnesty agreement Stolt-Nielsen signed with the Antitrust Division in January 2003.

In March 2006, a two-judge panel of the Third Circuit appeals court reversed the injunction, holding that district courts do not have the authority to enjoin the Antitrust Division prior to an indictment.

Stolt-Nielsen says it remains confident that any forthcoming action against the company will be dismissed because of the binding terms of the amnesty agreement.

"To induce the company to enter into an amnesty agreement, the Antitrust Division promised in the agreement freedom from indictment,'' James B. Hurlock, an outside director and Chair of the SNSA Board of Directors' Legal Affairs Committee said. "Now, after we relied on the Division's words, the Division has reneged, saying it only promisedfreedom from conviction.''

Hurlock said that today's decision in no way affects the company's request that the Supreme Court hear this case on its merits. That petition (formally known as a petition for a writ of certiorari) was filed on July 21st and is still pending before the Supreme Court.

The company took the extraordinary measure of seeking the stay from Justice Stevens in his role as Circuit Justice for the Seventh Circuit because of the split between the Seventh Circuit and the Third Circuit on the underlying constitutional issues at stake in this matter.

Importantly, the federal district court made 89 findings of fact,including that Stolt-Nielsen had performed its side of the bargain. The district court remains the only court to have considered this case on its merits.

The Third Circuit did not disagree with the district court's factual findings, including its conclusion that prosecution by the Antitrust Division would breach the Amnesty Agreement. The Third Circuit furtherheld that the appropriate procedure for Stolt-Nielsen, following any charges, would be to file a pretrial motion to dismiss the indictmentbased on the amnesty agreement defenses. The Third Circuit emphasized that Stolt-Nielsen could file such a motion immediately after charges were brought.

"Stolt-Nielsen will pursue every avenue to prevent this flagrant breach of covenant and abuse of power by the Antitrust Division,'' Hurlock said. "Although the Supreme Court did not grant our Renewed Application, we will promptly move to dismiss any action brought against the company by advancing the very same legal arguments that prevailed when the district court first enjoined any prosecution based on our amnesty agreement with the Antitrust Division.''

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