LONDON (Alliance News) - Oxus Gold PLC shares were suspended on Wednesday amid concerns about the future of the company after its claims made against the Republic of Uzbekistan dating back to a dispute from 2011 were dismissed by an arbitration court.
Oxus was involved in arbitration proceedings and a compensation claim related to the loss of the Amantaytau Goldfields and Khandiza mining assets. The group was pursuing arbitration proceedings against the Republic of Uzbekistan, where the two fields are located.
The company went into international arbitration proceedings in August 2013, seeking damages of about USD400.0 million, after Uzbekistan government-backed companies initiated an audit of Oxus's Amantaytau Goldfields joint venture. Oxus alleged the audit was set up to find reasons to justify the liquidation of Amantaytau.
On Wednesday, however, the UNCITRAL international arbitration tribunal ruled against the company nearly entirely, dismissing its claims on its investments in the Amantaytau joint venture with the exception of a finding of a breach of "fair and equitable" treatment standards. The latter resulted in Oxus being awarded USD10.3 million in damages.
Oxus is now in the process of analysing the final decision, as the only possibility of challenging the final award would be to go through the French courts, as Paris is the seat of the arbitration. The firm may have to engage in talks with its litigation funder and other creditors prior to making a decision on challenging the ruling.
As a result of the decision, a "material uncertainty" now exists over Oxus' ability to continue as a going concern, the company said. Its shares will be suspended until more clarity can be provided on its financial position.
"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," said Richard Shead, chairman of Oxus.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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