TORONTO (miningweekly.com) – Canadian natural resource developer World Wide Minerals (WWM) on Monday reported that it, together with its Canadian president and CEO Paul Carroll, had launched arbitration proceedings against Kazakhstan under the 1989 agreement between the Canadian government and the Union of Soviet Socialist Republics for the promotion and reciprocal protection of investments (the Canada/USSR BIT).

Based upon its multi-million dollar investment in 1996/97, WWM managed and operated one of the largest uranium-processing facilities in the former Soviet state.

WWM said it had entered into numerous agreements with Kazakhstan whereby the government promised its full cooperation in the venture, and WWM “poured millions of dollars” of capital investment into the country to repair and modernise the uranium processing facilities and to finance uranium production and expansion.

“Soon thereafter, however, the Republic of Kazakhstan breached its contractual obligations to WWM and imposed upon it bureaucratic restrictions aimed solely at frustrating the object and purpose of those contracts – ultimately leading to the suspension of operations at WWM's facility, and the bankruptcy, confiscation, and forced sale of its Kazakhstan assets by the state,” WWM said in a statement.

Carroll said the arbitral claim sought to "hold Kazakhstan accountable for its deliberate acts and omissions that deprived WWM of its substantial investment in the country".

Lawyers in Jones Day’s Global Disputes practice in Washington, DC and London, England, were representing the claimants.

"WWM was encouraged by the government of Kazakhstan to invest in the country's mineral resources at a time when it desperately needed foreign investment and know-how, and was subsequently deprived of its investment by the state's unlawful acts. This is precisely the sort of conduct that the Republic of Kazakhstan pledged to avoid when it expressly succeeded to the obligations under the Canada/USSR BIT,” Jones Day's London office partner Baiju Vasani said.

Sir Franklin Berman KCMG QC of Essex Court Chambers, London, England, is the claimants' party-appointed arbitrator to a three-member arbitral panel to decide this dispute. The arbitral panel under the UNCitral arbitration rules was expected to be fully constituted early in 2014.