Further Update on Mozambique Court Proceedings

RNS Number : 0243B

Pathfinder Minerals Plc

31 December 2014

 



For immediate release: 31 December 2014

Pathfinder Minerals Plc

("Pathfinder" or "the Company")

Further update on Mozambique court proceedings

Application for recognition of English court costs orders

Pathfinder announces that it has received judgment in respect of its application to the Mozambique Supreme Court (the "Supreme Court") for recognition of orders by the English court for costs aggregating £106,000 (the "First Costs Order") to be paid by General Jacinto Veloso, Diogo Cavaco and General Veloso's company, JV Consultores Internacaionais, Limitada (the "Defendants").

The Company is awaiting a full translation of the Supreme Court judgment but is advised by its Mozambique lawyers that the Supreme Court has rejected the Company's claim for recognition of the First Costs Order while upholding, with one exception, all of the Company's arguments.

Importantly, the Company understands that the Supreme Court confirmed that the judgment of the Maputo Court obtained by the Defendants in October 2013 (the "October 2013 Judgment"), which determined, contrary to the English court, that Pathfinder's wholly owned subsidiary IM Minerals Limited ("IMM") was not the legal owner of 99.99% of the shares in Companhia Mineira da Naburi ("CMDN"), is not binding on Pathfinder.

The Supreme Court also rejected the Defendants' argument that the English courts did not have jurisdiction to determine the dispute because of the inconvenience for the Defendants in having to defend legal proceedings in London.

However, the Supreme Court determined that the jurisdiction clauses contained in the agreements which were the subject of the dispute were not valid as a matter of Mozambique law because they conferred jurisdiction on the courts of England and Wales without specifying which court in England and Wales was to have jurisdiction (or providing the criteria for selecting the competent court).  The Supreme Court rejected the Company's application for recognition of the First Costs Order on this basis alone. The Company is investigating the possibility of an appeal or other remedies against the Supreme Court's rejection of the application for recognition of the First Costs Order. 

The Company is advised that the formulation conferring jurisdiction on the courts of England and Wales contained in the jurisdiction clauses in question is entirely standard for English law governed contracts. The Supreme Court's judgment would therefore seem to have serious implications for other existing and future foreign investors in Mozambique.

In the meantime, the Company notes that, as previously announced, the courts of Mozambique have already determined on two previous occasions that IMM is the legal owner of the shares in CMDN and the Supreme Court's judgment has no impact on those decisions (albeit that they remain subject to appeal).

Speaking after the judgment Nick Trew, Pathfinder's chief executive, said: "It is perverse that the Company's application for recognition of the first claim for costs should be rejected on the basis outlined in the judgment. The jurisdiction clauses contained in the contracts were in standard form and are no different to the clauses which appear in countless contracts around the world conferring jurisdiction on the courts of England and Wales. While this first judgment concerns only the recognition of a relatively small order for costs, the implications for foreign investors in Mozambique are profound. Those investors with standard form jurisdiction clauses conferring jurisdiction on the courts of England and Wales (or potentially the courts of any other country) can now have no confidence that the parties' mutual choice of jurisdiction for determination of disputes will be respected by the Mozambique courts.

"Notwithstanding the matter of costs, I am pleased that the Supreme Court has held that the October 2013 Judgment is not binding on the Company. The Mozambique courts have now twice determined that IMM is the lawful owner of the shares in CMDN and we will continue to focus our efforts on recovery of the Company's assets for the benefit of the Project and Pathfinder's shareholders." 

Enquiries:

Pathfinder Minerals Plc

Nick Trew, Chief Executive

Tel. [phone]

WH Ireland Limited (Nomad and Broker)

Tim Feather or Liam Gribben

Tel: [phone]

Vigo Communications

Ben Simons or Ali Roper

Tel: [phone]

Email: [e-mail]

Notes to Editors:

Pathfinder Minerals Plc is incorporated in England & Wales and is admitted to trading on the AIM market of the London Stock Exchange.

Companhia Mineira de Naburi S.A.R.L., a subsidiary of Pathfinder Minerals, was issued mining concession licences 760C and 4623C on 13 September 2004 and 13 July 2011 respectively, each for a period of twenty-five years. Taken together, these mining concessions cover approximately 32,000 hectares of land on the Indian Ocean coast of the Zambezia province of Mozambique, known to contain the heavy minerals, ilmenite, rutile and zircon.

As announced on 3 February 2012, ownership of these licences is being disputed.

 

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