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Churchill Mining shares advance as arbitration claim moves forward

Published: 09:37 15 Oct 2012 BST

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Churchill Mining (LON:CHL) shares advanced around 13% on AIM this morning as it confirmed the appointment of an arbitrational panel to its legal claim against the Republic of Indonesia.

The company made its claim in May to the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC. 

The company says that the appointment of a panel is positive as it signals that the arbitrational claim is moving forward.

"Indonesia first seemed to be in denial about its obligation to respond to the ICSID arbitration, so it is positive that Indonesia now appears to have accepted that Churchill is entitled to have its case heard," said managing director Nicholas Smith.

Smith adds: "Indonesia recently issued two Presidential Decrees that appear to place the responsibility for the ICSID arbitration with the East Kutai regional government. 

“While I can't speak to the Indonesian government's reasoning for doing this, the principles of international law are clear. The primary liability to satisfy any judgement or arbitral award will always be the responsibility of the Republic of Indonesia, i.e. the central government, which acts as a guarantor for its regional or provincial governments."

Churchill explained that with a panel now formally constituted the next phase of the arbitration process will begin, with the investigation and determination of the merits of Churchill's claim.

The company nominated Professor Albert Jan van den Berg of the Netherlands as one of the three panel members, while Indonesia appointed Michael Hwang SC of Singapore as the second member. 

Both parties agreed upon Professor Gabrielle Kaufmann-Kohler of Switzerland as the third and presiding member of the panel. 

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