Out-of-court Settlement in Frame Regarding Talc Mining Dispute

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A nugget of talc (stock photo by TASR)

Bratislava, December 16 (TASR) – The dispute between a company called EuroGas and Slovakia concerning the withdrawal of a licence for talc mining in Gemerska Poloma (Kosice region) has been gathering pace, as an alleged out-of-court settlement worth €240 million instead of the original €2.3 billion could be in the frame, Peter Corej, a witness for the Slovak part of the proceedings, confirmed for TASR on Friday.

“It’s always been about an out-of-court settlement on the part of the plaintiff. However, this is just extortion of Slovakia, which hasn’t succumbed to the pressure as yet. These claims can be confirmed by the fact that they [EuroGas] have mysteriously stopped demanding €2.3 billion but [require] a mere €240 million,” said Corej. EuroGas chief Wolfgang Rauball hasn’t confirmed interest in this kind of agreement as yet.

“We’re expecting to win the arbitration proceedings against Slovakia. We want to submit evidence of deliberate deception of the arbitration tribunal by the Slovak side at the next stage of the proceedings,” Rauball told TASR. This evidence is supposed to be a video from the Saint Barbara [patron saint of miners] celebrations held in 2015 by Eurotalc, a company that mines talc at the moment. The then authorised representative of the company and Slovakia’s witness in the arbitration, Ernst Haidecker, claims in the video that the firm had been stripped of its mining rights in 2011 and that it had to lay off half of its workforce.

Rauball claims that this attests to the fact that the arbitration tribunal was deceived during the court proceedings in Paris. Slovakia claimed that Eurotalc, previously known as VSK Mining, launched full operation and mining on April 9, 2010. Rauball also claims that, according to Slovak law, the main mining authority should have announced a new tender.

“The fact that the mining authority has silently and illegally resumed the company’s mining rights is proof of unlawful and corrupt behaviour. It’s solid proof of what we’ve been asserting for ten years,” stated Rauball. Corej said that the aforementioned video doesn’t represent substantial evidence and serves only to divert attention from the fact that EuroGas has never conducted any mining activities, has never had any employees and that talc mining in Gemerska Poloma was its only project. “However, it wasn’t keen on making the deposit technically available, but just sought to acquire the mining licence and then sell it on advantageous terms to a company called Mondo Minerals. Between 1997-2004 they had the opportunity to begin mining via a company called Rozmin; no one tried to halt them. They’ve lost the mining site due to their own inactivity,” emphasised Corej, who submitted 130 written pieces of evidence from between 1993-2015 at the arbitration.

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 was demanding compensation of €2.3 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, with the final verdict expected to be made in 2018.

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. The total amount thus climbed to €1.5 billion. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czech and Slovak Federative Republic (CSFR) and the USA from 1991 had been violated. The Slovak Finance Ministry has denied that any such agreement was broken.

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