Centerra says shareholder conspired to ‘wrongfully expropriate’ Kumtor

Centerra is seeking to hold the government and State-owned Kyrgyzaltyn responsible for “any and all losses and damages as a result from the coordinated campaign” to seize the gold mine, it said in a statement on Wednesday.

The amended notice added claims against Kyrgyzaltyn, the refining monopoly in Kyrgyzstan and Centerra’s largest shareholder, asserting that Kyrgyzaltyn conspired with the government to take control of the mine under the guise of temporary external management.

Centerra operated the gold mine until May, when Kyrgyzstan lawmakers passed legislation giving the State power to temporarily take control of the mine and appoint external management to address alleged environmental and safety problems.

Kyrgyzstan named Tenig Bolturuk, Kyrgyzaltyn’s former nominee on the Centerra board, as GM of Kumtor following the seizure.

Centerra explained that the amended notice asserted additional claims arising from the seizure of the mine and would seek to enjoin the respondents from any further actions to nationalise the mine or transfer Kumtor Gold Company’s assets.

Centerra’s claims would be adjudicated by a single arbitrator in arbitration proceedings to be held in Stockholm, Sweden and conducted under the rules of the United Nations Commission on International Trade Law. Under the agreements, the governing law is the law of the State of New York. Centerra has requested that the Permanent Court of Arbitration in the Hague designate an appointing authority to select an arbitrator promptly.

Meanwhile, Kyrgyzstan reported recently that the Kumtor mine was operating at full capacity and that it was meeting production expectations. In an one-month operational update on June 25, it stated that the “initial hurdles resulting from the manoeuvres of Centerra designed to impede smooth operations” had been overcome.