Oxus Gold’s long running arbitration against Uzbekistan authorities regarding the company’s investments in the Amantaytau Goldfields Joint Venture (AGF JV) and Khandiza deposit has ended in disappointment.
The United Nations Commission on International Trade Law (UNCITRAL) tribunal has dismissed Oxus’ claims, worth a potential US$400 million, that the Uzbek government expropriated the company’s investments in AGF and Khandiza.
It dismissed entirely the claims regarding the Khandiza deposit and also dismissed the company’s claims regarding AGF, except for a finding in its favour in relation to ‘fair and equitable treatment’ under a UK-Uzbekistan bilateral investment treaty. For that claim Oxus was awarded US$10.2 million 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’ part in the arbitration process was covered by an agreement with a third-party litigation funding group.
The UN ruling creates a material uncertainty over the group’s ability to continue as a going concern, Oxus said, and trading in its shares has been temporarily suspended.
Oxus chairman Richard Shead 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.”
Oxus says it is now analysing the tribunal outcomes with its legal advisors and adds that it may need to hold discussions with its litigation funder and its creditors prior to making any further decisions.
The company also clarified that Said Ashurov, formerly chief metallurgist at AGF, remains in an Uzbekistan prison on what it considers to be an unjust and improper conviction. It says that this matter is outside the scope of the UN arbitration process.
Founded in 1996, Oxus Gold listed on London’s Alternative Investment Market (AIM) in 2001 and has a 50% stake in the AGF JV, which is in the Kyzylkum region of Uzbekistan. Total JORC-compliant proven and probable reserves at AGF are 2.839 million ounces of gold and 6.739 million ounces of silver, of which half are attributable to Oxus.