19th Feb 2016 16:30
LONDON (Alliance News) - San Leon Energy PLC Friday said the allegation that the company is responsible for one of its subsidiary's GBP15.5 million liability is "specious" and said it plans to defend the claim "vigorously" despite losing an appeal over the matter earlier this week.
San Leon said earlier this week it had been unsuccessful in its appeal against a decision made by the International Court of Arbitration involving its Aurelian Oil & Gas subsidiary's acquisition of a stake in Energia Zachod.
In a case stretching back to 2013, Avobone NV and Avobone Poland BV took action against Aurelian over its acquisition of Avobone's 10% shares and loans in Energia Zachod, the holder of the Siekierki asset in Poland.
San Leon said at the time that it believed the request was without merit and has contested the claims, but the court last May ruled Aurelian had to pay GBP13.0 million, including costs, to settle the case. Two-thirds of the fee related to the repayment of a loan provided to Aurelian by Avobone.
San Leon started initiating that now-failed appeal against the decision in October, with the decision being made by the International Court of Arbitration of the International Chamber of Commerce.
On Friday, San Leon Energy said it Avobone has now requested GBP15.5 million from the company, claiming San Leon needs to pay the GBP13.0 million liability owed by its subsidiary Aurelian, plus accrued interest.
Avobone alleges there is a guarantee in place meaning San Leon is liable for the amount owed by its subsidiary as per the court ruling.
Despite losing the appeal earlier this week, San Leon doesn't seem willing to give in as it vowed to "defend this guarantee claim vigorously" on Friday.
San Leon said it believes the guarantee in question relates to liabilities of Aurelian for the 2014 financial year, and called the claim "specious".
"In the company's opinion, having conferred with counsel, Avobone's claim is specious as it is completely based on a standard Companies House audit exemption form, and there are no reported cases of such a form creating the guarantee claimed by Avobone, and none of the sums claimed by Avobone constitutes a guarantee because none of the sums were outstanding liabilities to which Aurelian was subject as at 31 December 2014," said San Leon.
"San Leon will defend this guarantee claim vigorously, and has been advised by counsel that there will not likely be a final decision in respect of the claim for 18 to 24 months," it added.
San Leon shares are currently suspended.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
SLE.L