PETROCELTIC International, which bought Edinburgh-based Melrose Resources last year, has become embroiled in a legal dispute related to its operations in North Africa.
The Irish oil and gas company said it had started legal proceedings against two parties with with which its previous board had entered into service and consultancy agreements related to its North African business activities.
Petroceltic said it had initiated the legal action in the High Court of Ireland after receiving correspondence threatening legal proceedings against it from one of the parties seeking payment of $3.4 million (£2.3m).
The agreements date back to 2004 and 2005 and contain provisions under which the parties could make claims for further material payments from the company, Petroceltic said in a statement.
The company was active in Algeria and Tunisia in 2004 and 2005.
In the statement, it said: "Petroceltic, having taken legal advice, believes that the original agreements constituted a fraud on the company and has consequently issued legal proceedings to have them declared void. The proceedings also seek recovery of significant payments made to the two parties under the agreements during 2005 and 2006."
Petroceltic remains active in Algeria, where it hopes to start production from the giant Ain Tsila gas field in 2017.
The company withdrew from Tunisia in 2010 when it relinquished its interest in the Ksar Hadada permit following two unsuccessful wells.
It increased its exposure to North Africa through last year's acquisition of Melrose Resources for £165m.
Melrose built up a significant portfolio of producing assets in Egypt, which is in the throes of a political crisis following the ousting of President Mohammed Morsi on Wednesday.
A spokesman for Petroceltic said its operations had not been affected.
Petroceltic has retained Melrose's operations base in Edinburgh, meaning the enlarged business retains a strong Scottish element.
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