Centerra initiates arbitration against Kyrgyzstan
Canadian miner Centerra Gold on Sunday announced that it had initiated arbitration against Kyrgyzstan to enforce its rights under investment agreements.
The company is seeking to prevent the government from taking further steps to implement recently adopted legislation or to pursue recently procured fines and tax claims against the Kumtor Gold Company (KGC), arguing that they violate the investment agreements.
“The leadership of the Kyrgyz Republic has acted with astonishing speed since the beginning of this year to undermine the basis on which the Kumtor mine has been operated and has refused to engage with us on any matters it considers to be the subject of dispute,” said Centerra president and CEO Scott Perry.
On May 6, Parliament passed a new law which enables the government to impose an “external manager” to take control of the Kumtor mine if the government deems that KGC’s activities pose a risk to human safety and the environment.
A day later, a $3-billion fine was imposed against KGC based on private civil environmental claims.
Centerra claimed that authorities had intimidated KGC’s personnel, that several senior managers had police visits to their homes and that KGC’s offices were raided at the weekend.
The miner said its claims would be adjudicated by a single arbitrator in arbitration proceedings to be held at Stockholm, Sweden and conducted under the rules of the United Nations Commission on International Trade Law.
The parties have 28 days during which to agree on an arbitrator, failing which Centerra would ask the Permanent Court of Arbitration at The Hague to appoint an arbitrator. Under the agreements, the governing law is the law of the State of New York.
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