Arbitrator delivers mixed outcome in DRA, LMDC contract dispute
JSE- and ASX-listed mining consultancy DRA Global has advised of a mixed outcome from an arbitration process between itself and Liqhobong Mining Development Company (LMDC) in disputes over a contract.
Notably, the final award, handed down by arbitrator Advocate Michael Kuper, determined that DRA was not grossly negligent.
DRA had entered into an engineering, procurement and construction management contract for the expansion of the Liqhobong mine, in Lesotho, in June 2014.
The mining consultancy later started arbitration proceedings against LMDC for unpaid invoices and incentive scheme payments, for which an arbitration hearing was already concluded by July 2021.
DRA first expected the award to be handed down during the second quarter of 2021.
LMDC, meanwhile, counterclaimed citing gross negligence based on a failure by DRA to consider alternative designs, which DRA was absolved of in the final award.
DRA originally filed three claims totalling R68-million, or $6.2-million, while LMDC filed six counterclaims totalling R289-million, or $26.3-million.
Two of the DRA’s claims and three of LMDC’s counterclaims were dismissed in the final award.
The remaining claim awarded to DRA amounts to R1.76-million, or $160 405, plus interest and costs, and the remaining counterclaim awarded to LMDC amounts to R31.2-million, or $2.85-million, plus interest and costs.
DRA says it did not make provision for an award in favour of LMDC and, therefore, the net amount payable to LMDC will be reflected in the profit and loss results details for the current financial year.
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