Rumours: Jurisidiction

Market rumours today "that it was found that the International Arbitration Panel does have jurisdiction to hear Churchill Mining's case.' Albeit the caveat is the same chap that told me this, said Rurelec "wouldn't be nationalised.' However, common-sense states if Churchill Mining's rights have not been protected in the Republic of Indonesia, then the only port of call is International Arbitration.

Time will tell, albeit if Indonesia do similar to Oxus Plc, then Churchill Employees will be wanting/needing to leave the Country. The Jakarta Tribune Jakarta Tribune is already quoting an Indonesian Minister for the 'criminal investigations against Churchill Mining Employees relating to forged documents.' So it's more than likely other tactics of intimidation are utilised of the court of proceedings.

THE MINING LAW REVIEW - MINING LAW - UZBEKISTAN (Old Paper Published November 2012)

Avent THE MINING LAW REVIEW - MINING LAW - UZBEKISTAN

For those interested, page 14 onwards, otherwise read all to give a basic understanding...

What do the Oxus Plc Preliminary Results mean for the International Arbitration Investors

Oxus Plc Preliminary Results (Investegate) Link May 17 2013

Interesting analysis of the results by Richard Shead Executive Chairman. An update will come after a few meetings, but it's thought provoking? Anyone have any startling concerns or views? 

Updated: May 19th 2013 Items in Italics or blue are amended for ease of viewpoint or to bring attention to the issues with greater significance. 

Of course, there risks are that they don't recover above what the current valuation is post-3rd Party Funding and the amount of SEDA (Standby Equity Agreement) that's issued, albeit I as the assets have been expropriated it's a case of how much rather than losing. It's more realistic to expect near $150m than the claimed total after but only time will tell. 

SEDA's for those that follow, are known to trash the shares, likewise, the company can open short positions on the stock to improve their position in terms of the number of share per cash raised. One bone of contention that, if you look at every company on AIM excluding Xcite Energy to my knowledge has had their share price trashed as a result of a SEDA. 

CHAIRMAN'S STATEMENT

What’s only mentioned in the contingent Assets is the Jero0y Project. In May, Eurogold settled their lawsuit for A$7m in cash and shares, so that particular Damoclean sword no longer hangs over directors.  Additionally, in 2007 the old Jerooy property and a couple of other exploration properties in Turkey and Romania were sold to KazakhGold for $73m in shares, 90% of which it handed over to shareholders as a dividend.  A further amount up to $80m in cash will become due if KazakhGold obtains a mining license for Jerooy.  Arbitration with Kyrgyz Republic suspended pending withdrawal of claim May 6th, 2008

Most of last year was spent by directors and management in progressing the arbitration claim for the misappropriation by the Uzbek Government of both the Company's Khandiza and Amantaytau Goldfields mining assets in Uzbekistan, which resulted in a substantial destruction of shareholder value of your company.

In order to ensure that your company remains adequately funded to pursue its claims through international arbitration, it successfully put in place both a litigation funding agreement, which ensures that the legal costs of the claim will be funded through to its conclusion, and an equity funding agreement to ensure that your company's ongoing operational costs, which have as in the previous year been again reduced wherever possible, will remain funded during this most difficult period in the life of your company. Details of both these funding arrangements have been fully disclosed in various RNSs issued during the past twelve months. [I don’t see the purpose in the SEDA (Standby Equity Agreement) surely those shareholders now invested would support a fund raiser which would then enable the company not to drip feed to market and support the price]

It gives me great confidence that two professional companies well versed in litigation funding and value creation have, after reviewing Oxus' claims, taken the decision to provide the Company with the financial support necessary to progress these claims to what I confidently believe will be a successful conclusion for all stakeholders. [They owned an asset and this was expropriated by the Uzbekistan Government so it’s value rather than win or lose.]

With respect to the abuses suffered by certain of our former employees, I wish I was able to provide more positive news.

Mr Said Ashurov, AGF's former Chief Metallurgist, remains in prison in Uzbekistan on what the company considers to be an unjust and improper conviction for seeking to remove classified information from the country, despite high-level approaches made to the Uzbek authorities through diplomatic and other formal lines of communication. We continue to remain hopeful that Uzbekistan will on humanitarian grounds release Mr Said Ashurov, who I understand is critically ill, into the care of his family. [Rather says why people shouldn’t invest in Uzbekistan]

A number of other former employees have also had arrest warrants issued against them on what we consider are fabricated charges. It is regrettable that the arrest and / or imprisonment of employees is a standard tactic adopted by the Uzbek Government in its various disputes with foreign investors in the expectation that the investor will capitulate and not progress its claim for compensation.

Despite these pressures, your company remains willing to consider offers from the Uzbek Government to settle our claims on a fair and equitable basis taking into account the independent valuations of the assets misappropriated. If no such offer is received, your company will continue with its claims which are currently scheduled to be heard before the arbitral tribunal in early 2014. [Gives a timeframe to work to for investment purposes but remember a Director (incorrect and edited) Mr A F Gibbons has recently purchased 32,241,600 ordinaryshares in Oxus Gold, which represents 7.22% of the issued share capital of theCompany. & Director Richard Shead Share Purchase

                                                                                                                                                                               

In conclusion I would like to thank my fellow director, management, staff and professional advisors for all their hard work and support during the past twelve months, which will hopefully lead to the enhancement of shareholder value in the foreseeable future.    

Richard Shead

Executive Chairman

16 May 2013

FINANCIAL REVIEW

During the year ended 31 December 2012 management has continued to pursue the arbitration proceedings seeking compensation for the Group in respect of the Amantaytau Goldfields ("AGF") and Khandiza mining assets in Uzbekistan. There are no other operating activities currently being undertaken by the Group. The Company's ability to continue with the arbitration process has been significantly strengthened through the further reorganisation of the Group's liabilities through entering into a litigation funding agreement and equity financing agreement.

For the years ended 31 December 2012 and 2011 the Group has accounted for the investment in AGF as an available-for-sale financial asset under IAS 39 Financial Instruments: Recognition and Management, recognising the loss of joint control of the investment. Although the outcome of the arbitration proceedings is uncertain, compensation sought from the proceedings exceeds the book value of the AGF and Khandiza assets. Accordingly no provision is considered necessary against the carrying value of the AGF investment. The carrying value of Khandiza, which was fully provided against in 2008, was reinstated during the year ended 31 December 2011.

In January 2011 the Uzbek shareholders in AGF agreed in principle to acquire the Group's 50% shareholding in AGF. In February 2011 the Group submitted a detailed offer to the Uzbek shareholders of AGF. No response has been received to the offer and instead AGF was subjected to an extensive audit of its financial and economic activities by an audit commission appointed by the Uzbek Government. This resulted in the Group becoming unable to manage the operational affairs of AGF and a declaration of force majeure in March 2011. On 31 August 2011 the Group commenced international UNCITRAL arbitration proceedings against the Uzbek Government in order to seek appropriate compensation. The Group has also included the loss of the Khandiza base metals project in 2006 within the proceedings. The Arbitral Tribunal has held that Oxus has standing under the Bilateral Investment Treaty between the United Kingdom and Uzbekistan to bring its claims for expropriation as a direct and indirect shareholder of the non-UK subsidiaries that have made the investments in Uzbekistan.

On 17 September 2012 the Group submitted its detailed Statement of Claim to the Arbitral Tribunal.

The Statement of Claim is accompanied by an independent quantum report prepared by the international accounting firm, Ernst & Young, and an expert opinion on valuation by international mineral consultants, Wardell Armstrong International, quantifying the losses to Oxus as a result of various breaches of the BIT by the Uzbek Government. The loss in respect of the Khandiza investment is quantified as ranging from $72.1 million to $588.7 million, and in respect of AGF from $480.3 million to $661.8 million.

The Ministry of Finance of the Republic of Uzbekistan brought a claim of $10.8 million against the Company in respect of the AGF Phase 2 Project Development Fund and obtained a judgment in its favour in the Uzbek courts, which it sought to enforce in the English courts. The parties have now agreed that all proceedings in respect of this court action will be stayed until after the Arbitral Tribunal has rendered its final award in the arbitration proceedings, or the arbitration is finally discontinued or disposed of.

Since March 2011 the Group's access to the accounting records, financial information and production data of AGF has been severely restricted. In September 2012 insolvency proceedings were commenced against AGF following a decision by the Navoi Regional Economic Court of Uzbekistan. The Group, despite being AGF's largest creditor, was not appropriately consulted during these insolvency proceedings and in February 2013 AGF was declared bankrupt by the Navoi Regional Economic Court. The declaration of bankruptcy is not expected to negatively impact the arbitration proceedings.

Lawsuit seeks Criminal Investigation on Churchill Mining for Falsifying Evidence (My view is the man's deluded but perhaps intimidating??)

Lawsuit Seeks Criminal GOI on Churchill Lawsuit Seeks Criminal Investigation on Churchill Mining Tribune Article May 15, 2013

Another translated via a friend. In essence I believe they're trying to intimidate Churchill Mining.

TRIBUNNEWS.COM, JAKARTA - The Indonesian government will criminally investigate and probe evidence/documents that has been allegedly falsified Churchill Mining Group. This step will be a separate to the legal process of arbitration at the International Center for Settlement of Investment Disputes (ICSID).

This was said by the Regent of East Kutai, Isran Noor, in Jakarta, after following a series of hearings Arbitration in Singapore on Tuesday (14/05/2013) night. Isran confirmed it is exploring the criminal legal action.

"They, the plaintiff [Churchill Mining and Planet Mining], consider this case worthy to be brought to ICSID arbitration. Though it is unreasonable; Tribunal itself is of the opinion that the plaintiff delivered a lot of things that are not in accordance with reality. Examples Including bilateral relations that have nothing to do with this case. Almost like comparing Netherlands to Senegal, then Netherlands also with the Philippines, "said Isran.

Isran explains, from in-depth review of the results by the legal team of the Government of Indonesia, indicated most of the documents are falsified by the plaintiff [Churchill Mining and Planet Mining] and its subsidiaries (the group members). This includes thesignature permitting mining activities in the district.

"They [Churchill Mining and Planet Mining] then asked in the arbitration forum, why if this is truly a forgery, was not brought into the criminal realm. I reiterate, that revocation of Ridlatama Group as an administrative sanction has been very giving lessons and a tremendous pressure," said Isran. 

"But when they're ready, we'll bring this issue to the point of criminal law. We just do not want to move currently as it is regarded as criminal intimidation whilst the arbitration process is running. But if they continue to sell it, we will buy it. If they sell a fish, we will buy it, "he added. [Are Churchill & Planet a Fishing Company????]

Isran given administrative sanctions assert a form of East Kutai regency humanitarian approach in the investment sphere. Because the Ridlatama already suffered huge financial losses upon revocation of the IUP.

"Ridlatama Group is partnering does not fit the rules. Breaking laws because they do not report the cooperation with the local government," he said. With the recent developments, the defendant will wait and see the next steps of the plaintiff.

"For now we still wait and see. We are optimistic that we are in the correct position. Tribunal have also heard directly from other parties the revelation they [Churchill Mining and Planet Mining] are now carrying the alleged falsification of documents into the realm of law. We will explore the criminal action, but we do not want this to be assessed as intimidation of the arbitration process, "he said.

Isran confirmed legal proceedings will be interpreted as a step to keep the government's National Pride. "We want investment in Indonesia to go well. This is not to discourage investment. However it is to provide legal certainty for investors, both domestic and abroad," he said.

East Kutai regency Rejects Negotiations with Churchill Mining - Tribune Article

East Kutai regency Rejects Negotiations with Churchill Mining (Original Article & Text in Indonesian) May 13, 2013

I've endeavoured to have a friend translate this one (got to be better than Google Translate).

East Kutai regency Rejects Negotiations with Churchill Mining - Tribune reporter reports Kaltim, Kholish Chered of Singapore

TRIBUNNEWS.COM, SINGAPORE - The inaugural session of arbitration between the Government of Indonesia is facing a lawsuit from Churchill Mining Plc, a British company, at the International Centre For Settlement of Investment Disputes (ICSID) being held this morning, Monday (13/05/2013).

The trial will be held in Stamford Raffles Room, Maxwell Chamber 3 Temasek Avenue # 16-10, Centennial Tower, Singapore. 

At the beginning of the arbitration hearing, the Government of East Kutai Regency, as the named defendant, still refused to negotiate steps. This was said by the Regent of East Kutai, Isran Noor.

"They seem to want to negotiate. There is an impression like that. But I do not want to. However it has not been formally conveyed," said Isran Noor told Tribune Kaltim (Tribunnews.com Network).

Based on the ICSID website, a hearing conducted in Singapore as the meeting between Churchill Mining the Republic of Indonesia, as well as Planet Mining Pty Ltd with the Republic of Indonesia (ICSID Case No.. ARB/12/14 and 12/40).

Legal team of the Republic of Indonesia (RI) has appointed Singapore-based arbitrator, Michael Hwang to oppose Churchill in ICSID, which is suing the Republic of Indonesia for USD 2 billion, or about Rp 18 trillion. Plaintiff pointed to Albert Van Den Berg. While the chairman is Prof. Gabriel Kaufmann tribunalnya.

Michael Hwang is an arbiter of Singapore. In 1991, Michael had appointed a Judicial Commissioner of the Supreme Court of Singapore. After completing his term in 1992, Michael was promoted as one of the senior advisors in 1997. Later he became President of the Law Society of Singapore.

Earlier, President Susilo Bambang Yudhoyono (SBY), has appointed East Kutai Regency to become parties to the ICSID process conducted arbritase. It is stated in Presidential Decree No. 30 of 2012, published 22 September 2012.

"We were given full responsibility to face the lawsuit. Was better, as I became more free. Nonetheless Kemenkum Attorney General and Human Rights remains a leading institution," said Isran.

In the decree [One assumes the international arbitration decree], mentioned the appointment of the East Kutai Regency of ICSID consent is not required as stipulated in Article 25 paragraph (3) of the Convention on the Settlement of Disputes between States and foreign nationals regarding investments.

"The President also commissioned the Minister of Law and Human Rights Amir Syamsudin to take the necessary measures so that the appointment of the East Kutai regency registered and announced by the ICSID in accordance with the conventions, rules, and regulations in the ICSID," according to the announcement.

Then, because the Indonesian side plays as a defendant, who bears the cost for arbitration at ICSID? And related costs of internal preparation, such as the appointment of arbitrators and consolidation, whether sourced from the state budget, budget, or other sources?

Responding to these questions, Isran Noor just give a brief answer, that each party should pay. "Equally the cost of necessities such as hearing," he said via text message.

While referring to Presidential Decree 78 of 2012 on the appointment of the Indonesian legal team, as quoted from the official website of the Secretariat of the Cabinet of the Republic of Indonesia . While the costs required for the implementation of the duties and authorities Attorney Time are charged to the state budget. It's not yet known whether the appointment Kutim as a responsible party, along with a variety of legal manoeuvres, will also be borne from the budget or just have an impact on the use of the East Kutai budget for litigants.

Because the regulation of the formation of power law (Presidential Decree 78/2012) and Decree of the President on the appointment of the East Kutai regency as a responsible litigant (Presidential Decree No. 30 of 2012), were both issued on 22 September 2012.

Churchill Mining lawsuit to Down 1 Billion USD Tribune New Jakarta Article + Video in Indonesian

Now they're asserting that the Politician's have reduced the claim by Churchill Mining and not the process. Very Bizarre and also inferring they're a Healthy Place to invest...Google Chrome Translation

 Original Article: Tribune News Jakarta Churchill Mining Article May 13, 2012 + Video

Churchill Mining lawsuit to Down 1 Billion USD

TRIBUNNEWS.COM, SINGAPORE - The plaintiff in a dispute over an international arbitration at the International Center for Settlement of Investment Dispute (ICSID), that Churchill Mining and Planet Mining, apparently has "lowered" its demands on the government.

This was said by the Minister of Justice and Human Rights, Amir Shamsuddin, told a news conference in Stamford Raffles Room, Maxwell Chamber 3 Temasek Avenue # 16-10, Centennial Tower, Singapore, Monday (13/05/2013).7

"Demands plaintiff has dropped 50 percent. Now to $ 1 billion.'s Been down before examined. Though there is still a USD 1 billion, it requires that a minister should be present constantly. If we save fuel because they want to save Rp 30 trillion.'s Already 10 trillion , "he said.

Amir explained, although currently underway court or tribunal ICSID, the government will provide guarantees good investment in Indonesia.

"So that information can be publicized trial tribunal properly. So it does not appear that her mistaken perception, as if the government dealing with investors," he said.

He asserted that the government, with a variety of devices legislation, so protect investors. Not only in the context of encouraging the growth of good investment and healthy, but also provides protection by the rules that are already running.

"Now there are those who claim the parties or investors who feel aggrieved. That being tested now. Did they claim that they are an investor, as appropriate criteria clauses in investment rules, their use is appropriate," he said.

"In the first stage, we use jurisdiction. They have to prove themselves, that they actually protected the investor legislation. Yet go to the material," he added.

But also inevitable in the early sessions, the applicant, in this case, and Planet Churchill Mining (as part of Churchill), has brought an expert or an expert, Prof. Nono Anwar Makarim.

"That's what we're testing. Opinion he not only provide for Churchill, but also never gives articles in the media, The Jakarta Post, in August 2012," he said.

Indonesian parties conduct cross examination of what became the expert explanation. Especially the content of opinion with the opinions widely publicized in the article.

"Just get there. And there will be this long. Tomorrow is only around in the jurisdiction," he said.

Patience & an Admin Issue.

There's good belief that the Jurisdictional Issues will be reported on quickly post today's panel hearing. As it's a major issue, it'll be decided on and updated quickly subject to there being further issues that complicate the matter further  (time-frame inferred by a few people has been a maximum of two weeks). It's maintained with the information that is available that ROI (Republic of Indonesia) have no basis for appealing the jurisdictional issues as its clear Churchill were not afforded the protection that they should have been; at the very least in the Indo Legal System. This from what has been researched is an attempt to avoid any responsibility and its been suggested by parties is a way of delaying the process. Only time will tell....other views welcomed. 

On admin issues regarding comments and messages: opinions either way are welcomed, what isn't are the following;

a) Abuse of any form.

b) Any link to Directors Talk, please provide the original link. Each link will be checked where possible if it's valid original material produced by Directors Talk, it shall be produced...otherwise no. 

c) No party can advise others to buy or sell shares. If you're asking the question of others in our view you should not be investing. The views are merely opinion and are not the basis for advice, an offer or invitation to purchase shares.

As previously mentioned; PROCEDURAL ORDER NO. 6 (ITA Law Website) covering the agenda/proposals for 13-14th May 2012 (update subscription available from: Email Updates (left hand side) and Newsletters as well from Professor Andrew Newcombe University of Victoria Faculty of Law.

It's envisaged there will be a download of the issues, risks and relevant links; time permitting of course. Any comments/suggests of content are welcome. Any publication or anonymous requests will always be adhered to, as some people wish to remain anonymous. 

Also available directly at: 

International Centre for Settlement of Investment Disputes (ICSID) World Bank Items 131 & 162