4th Sep 2019 16:19
(Alliance News) - AIM-listed marble quarrying and processing firm Fox Marble Holdings PLC said Wednesday it has launched arbitration proceedings against the Republic of Kosovo for damages in excess of EUR195 million.
Fox Marble said the Kosovo government has failed to protects the company's rights at the Malesheva quarry and so it launched United National Commission on International Trade Law international arbitration proceedings.
Fox Marble bought Green Power Shpk and Scope Shpk for GBP1.3 million combined in May. Green Power owns the licence for the Malesheve quarry in Kosovo.
However, since then, Green Power and Scope have challenged the acquisition agreement, with Fox Marble saying the sellers "reneged on the agreement". Fox Marble believes the claims of the seller to be "wholly unfounded". However, it has halted Malesheve work until the issue is sorted.
Since then Fox Marble has been working to resolve the dispute concerning the purchase of Green Power and Scope with the appropriate Kosovan Government agencies, namely the Kosovo mining regulator, the Independent Commission of Mines and Mineral and the Agjencia e Regjistrimit te Bizneseve, the Kosovo business registration agency.
In a statement, Fox Marble said: "As the company believes the Kosovan Government to be in clear breach of its responsibilities towards the company which is a foreign investor in Kosovo, the company is of the opinion that this action is in the best interests of its shareholders and employees and anticipates a fair and satisfactory resolution."
Fox Marble continued: "In what is a clear breach of Kosovo Law 04/L-220 'On Foreign Investment' (2014), Fox Marble has been prevented from asserting its rights in these matters. This is a law that should provide extensive protection to foreign investors, such as Fox Marble, and promises even handedness in the treatment of foreign investors and local businesses."
The company said it has presented detailed evidence to the ICMM that it holds the relevant rights to grant develop, exploit and operate the Malesheva quarry. Fox Marble said "numerous" procedural and legal challenges have been filed in Kosovo to re-open the mine but these have "failed to bring the matter to a satisfactory conclusion".
Fox Marble said it has also presented the ICMM with detailed evidence of its purchase of Green Power and Scope and shown that the owners had "no basis to rescind the share purchase agreements".
"Despite the cumulative weight of evidence, Fox Marble was denied the right to appeal any decision relating to the Malesheva quarry in direct contravention of the provisions of the Kosovo foreign investment law," Fox Marble added.
Fox Marble Chief Executive Chris Gilbert said: "Fox Marble has always sought to work in partnership with Kosovo and its government. We have therefore taken this step with the greatest reluctance, but the current circumstances and decisions made have left us with no choice.
"There has been a clear failure by the Kosovo government and its agencies to apply their own laws and regulation in a fair and equitable manner. It is beyond doubt that Fox Marble has a strong case. I am confident that the claim will be decided in our favour and that the award obtained will protect our investment, our shareholders and show that Kosovo is a place where international businesses can invest."
Shares in Fox Marble were 6.1% lower in London on Wednesday at 4.60 pence each.
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