MOSCOW, July 27 - RAPSI. An international arbitration tribunal has upheld Khan Resources Inc.’s (Khan) assertion of jurisdiction over a $200 million claim against the Government of Mongolia, according to a press release issued Thursday by Khan.
The ruling, necessitated by Mongolia’s objection to the tribunal’s jurisdiction over the claim, has opened the doors for the tribunal to rule both on the merits of the claim and on the amount of damages accrued.
Khan filed the arbitration action in January 2011 on the basis of an illegal expropriation claim. In its initial filing, Khan alleged that the Mongolian government had “caused substantial loss and damage to claimants and their investments through expropriatory, unlawful, unfair, and discriminatory treatment” in connection with the Dornod uranium deposit in northeastern Mongolia.
Khan issued the following statement Thursday on behalf of CEO Grant Edey: “We are pleased that the Tribunal has validated Khan’s initiatives to achieve recourse to damages suffered by our shareholders. Our treasury is well-funded and we will continue to vigorously pursue this action to its logical end to receive value for our investments in Mongolia.”
Khan is simultaneously engaged in a legal battle with Russian uranium producer Atomredmetzoloto (ARMZ). In August 2010, Khan filed a $300 million claim against ARMZ in a Canadian court on the basis of an alleged breach of fiduciary duties and damage to its rights, reputation, and property. Russia’s Justice Ministry refused to honor Khan’s request that it serve ARMZ with process. Khan then filed an motion with Ontario’s Superior Court to validate the service of process. Ontario’s Supreme Court initially held for Khan, but on appeal held for ARMZ on the basis of the theory that Khan had not exhausted all process service options. Khan is currently appealing the decision.