In 2017, Mongolian Copper Corporation LLC (“MCC”) brought an administrative case at the Administrative Court against the Government of Mongolia in connection with its decision with reference number 14, rendered in 2017 in re, inter alia, appointment of the full board members of Erdenet Mining Corporation LLC (“EMC”) and Mongolrostsvetmet LLC (“Monros”) by the state, and second resolution with reference number 07, rendered in January 2018 in re, inter alia, transfer of 49% shares of EMC and Monros to the state and claimed that these administrative decisions by the Government and its agencies have violated the applicable laws and legislations of Mongolia and legitimate interest of MCC.
The dispute finally resolved by the Supreme court of Mongolia on 19 September 2018 after two and half years and the court reinstated 49% ownership right of Mongolian Copper Corporation LLC in EMC and Monros. Before this judgement, the Supreme court resolved, on 07 December 2017, the case in relation with due acquisition of the shares by MCC and its ownership right of 49% shares. The Government of Mongolia recognized this judgment of the Supreme court and reinstated Mongolian Copper Corporation LLC as the 49% shareholder of EMC and Monros on 28 December 2017.
In accordance with the Constitution of Mongolia and the Law on the Court, the judgement of the Supreme court is final and comes into force immediately. MCC shall advance to have its shareholding rights reinstated in the two companies and further will cooperate with the state shareholder which owns 51% to convey shareholders and board meetings in order to resolve immediate matters of two companies.
As per EMC, MCC shall cooperate with the state shareholder on possible alternatives ways to resolve, among others, the ICBC Standard bank case, decided by the International arbitration court, in the best interest of EMC and recover the damages from those who are guilty. Further, the MCC shall continue its effort to increase efficiency and profitability of the two mines and development of open and transparent mining industry.
Mongolian Copper Corporation LLC
19 September 2018