Oxus Gold shares suspended after arbitration ruling

(ShareCast News) - Shares in Oxus Gold were suspended on the London Stock Exchange on Wednesday morning, as investors waited for clarification on the firm's exact financial position.The AIM-listed gold miner - the only publicly-listed firm with such operations in Uzbekistan - suffered a big blow this week when it was told it had lost its case against Uzbekistan's government in front of the arbitral tribunal.Oxus Gold commenced proceedings in front of the United Nations Commission on International Trade Law (UNCITRAL) on 31 August 2011, in relation to expropriation of its investments in the Amantaytau Goldfields joint venture and the Khandiza deposit.The tribunal dismissed Oxus Gold's claims entirely.There was one small exception - the tribunal did find a breach of the fair and equal treatment standard under the UK-Uzbekistan Bilateral Investment Treaty with regard to the Uzbekistan government's 2006 and 2009 modifications of the taxation regime applicable to the Amantaytau Goldfields venture.The tribunal awarded the company USD $10,299,572 (£6.92m) in damages, with interest of LIBOR + 2% to be compounded annually for 2004 to 2010, as its final award.Uzbekistan's counter-claims were completely dismissed without exception, for a lack of jurisdiction. Both Oxus Gold and the Uzbekistan government were ordered to pay their own costs, and half of the tribunal's expenses."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 Oxus chairman Richard Shead.In a statement, Oxus Gold said the only opportunity to appeal the final award would be through the French courts, as Paris was the seat of arbitration. It also said it may need to engage in discussions with its litigation funder and other creditors before deciding how to proceed."As a result of the decision of the tribunal, a material uncertainty exists in relation to the company's ability to continue as a growing concern and therefore to realise its assets and discharge its liabilities in the normal course of business", Oxus Gold said in the statement."The company will make further announcements as soon as possible, and trading in ordinary shares is expected to be suspended until clarification of the matters."