Canada-based Star Diamond has made headway in its case to take joint venture (JV) partner Rio Tinto to court over its purported exercise of four options under an option and JV agreement relating to the Star-Orion South project, in Saskatchewan.
This week, a Court of Queen’s Bench for Saskatchewan found that Star Diamond had successfully met its onus of establishing a serious issue to be tried in the legal proceedings. But Judge Grant Currie reportedly said that the junior could face an uphill battle in proving its case.
Star Diamond has put forward four claims that will be tried at the merits hearing, including that Rio Tinto Exploration Company (RTEC) did not validly exercise the second, third or fourth option in accordance with the option agreement, that RTEC misrepresented the costs associated with its work under the option agreement and that it was not upfront about exercising its options until results were available from the bulk sample of 2019.
The junior further claims that RTEC breached its duties of good faith and honest dealing by using its discretionary powers to undermine Star Diamond's contractual interest and dilute Star Diamond's interest in the JV.
“While each of these claims will ultimately need to be assessed and determined by the court at the hearing on the merits in the legal proceedings, Star Diamond is pleased that the court recognised, at this preliminary stage, that these claims represent serious issues to be tried at the merits hearing,” Star Diamond said in a statement.
Star Diamond added the court had not yet established a timeline for further hearings on the legal proceedings.