Initiation of Arbitration (5672A)
02 Aprile 2012 - 8:27AM
UK Regulatory
TIDMBKY
RNS Number : 5672A
Berkeley Resources Limited
02 April 2012
2 April 2012
Berkeley Initiates International Arbitration against Enusa for
an amount exceeding US$200 million
Pursuant to the announcement of the 1st of March 2012, Berkeley
Resources Ltd ('Berkeley Resources' or the 'Company') advises that
the Company's wholly-owned subsidiary, Berkeley Minera Espana
('BME'), has initiated International Arbitration proceedings
against Enusa Industrias Avanzadas, S.A ("Enusa"), through the
Paris-based International Court of Arbitration of the International
Chamber of Commerce.
It is the opinion of Berkeley, and its legal advisors in Spain,
that Enusa has, on a number of occasions, unjustifiably refused to
honour its contractual obligations under the Co-operation Agreement
of 29 January, 2009. In particular, it failed to incorporate the
Joint Venture company 'Newco' (90% BME, 10% Enusa) on the 29th
February 2012, resulting in a clear breach of that Agreement.
In addition to the complete fulfilment of BME's obligations, BME
has also provided Enusa with numerous opportunities to achieve a
satisfactory outcome and to avoid arbitration. These included the
granting of multiple extensions to postpone the formation of Newco,
and offering alternative, viable options to progress the
project.
The Co-operation Agreement establishes that the consequences of
such an event of material breach shall be that Enusa will return to
BME the non-amortised value of all its investments made and
expenses incurred. This includes (a) five million euro
(EUR5,000,000) to acquire the data and (b) any evidenced expenses
in which it may have incurred to carry out the Feasibility Study,
whether or not it has been completed. Enusa will also compensate
BME for any damages caused, including any reasonable loss of
profits.
BME is claiming compensation for a total amount estimated to be
in excess of US$200M, for the damages and losses caused by Enusa's
breach of the Co-operation Agreement.
Berkeley considers that it has a strong case. This assessment is
based on a number of factors, including: an independent technical
review (undertaken by a leading Spanish-based international
engineering company) of the Restricted Feasibility Study's
Conceptual Basic Engineering Report; an audit of the project
economics (undertaken by Spanish-based auditors specialising in
litigation); and advice from BME's international legal advisors in
Spain, who have considerable experience in successful commercial
arbitration actions within the country.
BME has informed Enusa that the Company is prepared to
collaborate at any time with the aim of achieving an amicable
solution, independent of any arbitration proceedings.
Berkeley Managing Director, Brendan James stated "Delays on the
joint venture project have been disappointing, and could not be
allowed to continue indefinitely. Arbitration is not the preferred
outcome for Berkeley, or for the region of Ciudad Rodrigo, but one
we are forced to undertake to defend our rights, and to achieve a
resolution. It is important to note that this action will not
distract the management team from delivering upon Berkeley's
100%-owned Salamanca I project. Being completely independent of the
Joint Venture Project, the Salamanca I project remains on-schedule,
and we expect to initiate construction in 2013".
For further information, visit the Company's web site at
www.berkeleyresources.com.au or contact:
Berkeley Resources Brendan James (MD) +34 92 3193 903
Martin Eales / Dan
RBC Capital Markets Conti +44 20 7653 4000
Emily Fenton / Ed
Tavistock Communications Portman +44 20 7920 3150
This information is provided by RNS
The company news service from the London Stock Exchange
END
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