Khan Resources Inc. believes that Mongolia’s attempts to annul the 105 million USD arbitral award against the Government of Mongolia in favor of Khan will not succeed, as stated in a recent legal update from the company.
“The Mongolian government is now trying to use the French legal system to get out of their final and binding obligations under the now complete international arbitration. This shows a fundamental lack of respect for international arbitration as a dispute resolution mechanism. Investors holding financial positions in Mongolia, underpinned by international arbitration as the dispute resolution process, should be very concerned with the Government of Mongolia’s actions,” said Grant Edey, president and CEO of Khan.
Khan’s uranium mine in Dornod Province was seized by the government in 2009 after the Nuclear Energy Law was approved, which provided the state with 51 percent of the Dornod property without compensation to prior owners.
On March 5, 2015, the international arbitration tribunal rendered an award in favor of Khan.
The government filed a notice on July 9 for annulment of the award in the French Court of Appeal in Paris.
“French courts do not review international arbitration awards on their merits and very rarely set them aside. In fact, under French law, an international arbitral award rendered in France can only be set aside on five grounds,” said Khan in its legal update.
“[Khan Resources] is of the opinion that the annulment proceeding has a limited chance of success and constitutes a frivolous attempt to delay the inevitable payment of the award. The annulment action in France does not restrict the company from seeking recognition of the award in France or any other jurisdiction. Once recognized as a valid award, the company can seek to seize non-immune sovereign assets in the jurisdiction where the award is recognized,” the company added
The government has five months from the date of the filing to submit their detailed written brief to the court, before December 8. Khan will have four months to submit its defense, before April 8, 2016.
Khan said that it has retained Christophe Seraglini of Betto Seraglini, a boutique law firm in Paris specializing in international dispute resolution, to represent the company in defending the annulment action.