International Mining Company Invest, which is 9.9% owned by MetalNRG PLC (LSE:MNRG), has filed for arbitration with the International Centre for Settlements of Investment Disputes (ICSID) for US$63mln plus interest and legal fees.
The dispute centres around IMC's uranium asset in Kyrgyzstan.
The parliament in Kyrgyzstan imposed a ban on all exploitation of uranium in the country in April 2019, just after it had granted IMC a mining licence for the mining of uranium within IMC's Kamyshanovskoye uranium deposit.
The deposit holds an indicated resource of 3.6mln pounds of U3O8, with 1.9mln pounds inferred.
Since the ban, MetalNRG has supported IMC with a convertible loan facility for a total of US$341,441 to date. The agreement between IMC and MetalNRG provides that repayment of the convertible loan facility is either via a conversion at three times the principal amount advanced into equity in IMC, if the project is reinstated; or repayment of 300% of the principal amount advanced in cash, in the event that IMC receives or reaches a compensatory settlement with the government of Kyrgyzstan.
The first hearing is scheduled for 9 March 2023.
The legal firm representing IMC, ENYO Law, is based in London.
ENYO has agreed a contingent fee arrangement based on the successful outcome of the claims presented to the ICSID.
ENYO Law will receive 50% of any sums awarded, after the deduction of legal expenses. The balance of any award will be due to IMC which will then distribute any sum on the basis of the arrangements currently in place with MetalNRG.
If the case is lost before the ICSID, IMC has no obligations or liability for legal ENYO's fees.
"After months of negotiations, IMC, with our support, has decided to proceed to arbitration and seek a full compensation for the projected benefits the project would have created,” said MetalNRG’s chief executive Rolf Gerritsen.