Loss at US Court Might Complicate Slovakia’s Position in Talc Arbitration

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Bratislava, February 7 (TASR) – American investigation authorities are examining reasons for arbitration between a company called EuroGas and the Slovak Republic concerning the allegedly illegal withdrawal of a licence for talc mining in Gemerska Poloma (Kosice region).

The court of the State of Utah in Salt Lake City is currently deciding on Slovakia’s appeal against the verdict denying the authenticity of its claim against EuroGas. “We found this claim amounting to $250,000 (€233,000) to be counterfeited. The Slovak Republic has bought it for $6,000 (€5,600); however, the court in Salt Lake City in the first round in October 2016 ruled in favour of us,” EuroGas managing board chairman Wolfgang Rauball told TASR. He said that an arbitration tribunal in Washington is now waiting for an appellate court’s verdict and then it’ll set the date of the next arbitration round.

At the next arbitration round, Rauball wants to submit new evidence of corruption that allegedly resulted in stripping EuroGas of the licence in 2004. “The evidence we’ve gained from the tax haven of Cyprus confirmed the suspicion that the licence’s revocation involved a fraud organised by the then representatives of the Slovak Government and a company called Schmid Industrieholding. The company later managed to get a licence through its subsidiary company called VSK Mining,” stated Rauball.

According to the information available to TASR, former chief executive officer of Mondo Mineral W. D. Keller already testified before the US governmental institutions in this case. Keller was allegedly offered the talc mining licence after EuroGas for a bribe of SKK 5 million (€165,970) in 2004. Plus 7 Dni weekly wrote about the case, adding that Keller turned down this offer and reported the case to his superiors.

The revocation of the licence prompted Rauball, on behalf of EuroGas, to launch arbitration proceedings against Slovakia at the International Centre for Settlement of Investment Disputes (ICSID). As the petitioner in the arbitration, which was launched in 2014, EuroGas is demanding compensation of $3.2 billion (€2.9 billion) from Slovakia for what it calls a marred investment. It’s expected that a verdict on the arbitration process could be released in 2017. No appeal against ICSID decisions is possible, although they can be overturned due to serious procedural flaws.

EuroGas began indicating its plans to take legal action against Slovakia over the loss of the talc quarry in 2010. At first, it demanded compensation of €500 million in 2011. One year later a company called EuroGas Inc., registered in the USA, also began claiming compensation. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the USA from 1991 had been violated. The Slovak Finance Ministry has denied that any such agreement was broken.

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