Khan Resources reports that the United Nations (UN) Commission on International Trade Law has taken the arbitration between project developer Khan Resources and the Mongolian Government to the quantum and damages phase.Khan says it has submitted to the tribunal seven volumes of documentation in support of its claim for $326 million, including interest from the July 2009 date of the expropriation of the Dornod uranium deposit by the Mongolia government.
Last May, the UN tribunal which heard the matter ruled on matters of jurisdiction and dismissed all of Mongolia’s objections to the continuance of the suit.The Mongolian Government has been allowed until April 5, 2013 to respond to the company’s claim and then Khan will have until June 28, 2013 to respond to the Government’s defence. The tribunal will meet from November 11 to 15, 2013, to hear the claim and their ruling would be expected in the first half of 2014. “While the process of international arbitration is long -- we initiated our suit in January 2011 -- we remain confident of a favourable outcome and that we will receive value for our investments in Mongolia,” Khan CEO Grant Edey said.
Khan alleged that during 2009 the Government, in concert with a Russian partner, took actions that amounted to the illegal expropriation of the company’s mining and exploration permits.Khan said this took place after the Government had invited and encouraged the company and its predecessors to invest millions of dollars, expertise and resources in the Dornod Aimag uranium project, in north-eastern Mongolia.
Khan said that just as it was preparing to start construction of the mine in October 2009, the Governments of Mongolia and Russia in January made a statement that they intended to exploit the resource, and by August, had formed a Dornod Uranium joint venture (JV).On December 14, 2010, Russian Prime Minister V. Putin and Mongolian Prime Minister S. Batbold signed an agreement confirming the JV, which also effectively confirmed the expropriation of Khan’s project rights.Subsequently Khan received a notice from Mongolia’s Nuclear Energy Agency in which it said Khan’s Dornod rights had been invalidated, retroactively from October 8, 2009.