Oxus Gold’s (LON:OXS) long running arbitration against the Uzbekistan authorities has ended in disappointment.
A United Nations arbitration tribunal has dismissed Oxus’s claims, worth a potential US$400mln, that the Uzbek government expropriated the company’s investments in the Amantaytau Goldfields Joint Venture (AGF) and the Khandiza deposit.
Richard Shead, Oxus chairman, said: "I am devastated by the decision of the arbitration award in relation to Oxus Gold and will continue to work with the company's lawyers to extract as much value as possible for shareholders of the company."
The UN ruling creates a material uncertainty over the group’s ability to continue as a going concern, Oxus said, and it added that trading in its shares will now be temporarily suspended.
The United Nations Commission on International Trade Law (UNCITRAL) tribunal dismissed entirely Oxus’s claims regarding the Khandiza deposit.
It also dismissed the company’s claims regarding AGF, except for a finding in favour of the company in relation to “fair and equitable treatment" under a UK-Uzbekistan bilateral investment treaty.
Oxus was, for that claim, awarded US$10.2mln in damages.
The tribunal also dismissed Uzbekistan’s counter claims in their entirety due to a lack of jurisdiction.
It also ordered each party to cover their own costs, as well as half the tribunal costs. Oxus’s part in the arbitration process was covered by an agreement with a third-party litigation funding group.
Oxus told investors that it is now in the process of analysing the tribunal outcomes with its legal advisors, and it added that it may need to hold discussions with its litigation funder and its creditors prior to making any further decisions.
Oxus also clarified that Mr Said Ashurov, formerly chief metallurgist at AGF, remains in a Uzbekistan prison on what the company considers to be an unjust and improper conviction. And it added that this matter was outside the scope of the UN arbitration process.