Image Source: Proactive Investors
Panthera Resources PLC, a UK-listed mining firm, has made significant headway in its high-profile legal fight with the Indian government by submitting its comprehensive Memorial-with a damages claim of US$1.58 billion-before an international arbitral tribunal. The claim, made by Panthera's Australian subsidiary Indo Gold Pty Ltd, focuses on the Bhukia gold project in Rajasthan and represents a decisive heightening of the protracted controversy over lost mining rights and supposed treaty violations.
$1.58 Billion Damages Claim Filed:
Panthera Resources, by and on behalf of Indo Gold Pty Ltd, has filed a detailed Memorial with the arbitral tribunal, officially valuing its damages claim at US$1.58 billion. The Memorial outlines the background to the dispute, incorporates all supporting evidence and witness statements, and includes the methodology for calculating the amount claimed.
Background to the Dispute
The dispute is about the Bhukia gold project, into which Indo Gold initially invested in 2004. The company complains that the Indian government violated the 1999 Australia-India Bilateral Investment Treaty when it denied a prospecting licence and subsequently altered mining rules in 2021, leading to cancellation of Indo Gold's rights and subsequent auction of the project site to a third party.
Arbitration Structure and Seat
The Permanent Court of Arbitration (PCA) is presiding over the case, with the legal seat set in London. The composition of the tribunal and preliminary case information are available to the public, but accompanying documents are not if not mandated by law.
Recent Developments:
Panthera's complaint follows the sale of part of the Bhukia zone, which earned the Indian government substantial upfront and performance payments and provided it with a 65% proportion of gold value produced by the new licensee. Panthera contends this highlights the worth lost as a result of the cancellation of its rights.
Litigation Funding Secured:
Indo Gold has obtained a maximum of US$13.6 million in non-recourse legal funding in litigation from LCM Funding SG Pty Ltd, which covers the arbitration process fully. LCM recovers only its investment in case Panthera receives damages.
Timeline and Next Steps:
The Memorial was to be filed by May 16, 2025, in accordance with the procedural calendar of the tribunal. The arbitration will unfold in the next three to five years, with Panthera funded throughout the proceedings.
Insight
Panthera Resources' $1.58 billion claim against India is among the largest international arbitration cases with the country's mining industry. The controversy reveals the risks and intricacies of cross-border resource investing and the huge financial stakes involved when government policy changes affect foreign investors. The result could have a precedent for coming resource-related treaty claims in India and elsewhere.
Source: Morningstar UK, MarketScreener, Undervalued-Shares.com, Investing.com
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