This is a question for all the amateur lawyers on the board who...

This is a question for all the amateur lawyers on the board who have been debating this problem for a while - is the AVZ arbitration actually winnable? I am no lawyer but it didnt take a lot of research to find this piece of advice by the US State Department, no less, that advises categorically that the New York Convention will not apply to this dispute. Extracted from the website as follows:

Democratic Republic of the Congo - United States Department of State

Dispute Settlement

ICSID Convention and New York Convention

The DRC is a member of the International Center for Settlement of Investment Disputes (ICSID) Convention and a Contracting State to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).

There is no specific domestic legislation providing for the enforcement of awards under the New York Convention. It is important to note that the New York Convention does not apply toward disputes relating to immovable property, which includes mining rights.

And Herbert Smith Freehills is also uncertain

https://hsfnotes.com/arbitration/2015/02/03/new-york-convention-enters-force-in-the-democratic-republic-of-the-congo/

However, in the legislation facilitating its accession the DRC made a number of reservations. These are: reciprocity (the DRC will only enforce awards made in the territory of other Contracting States);commerciality (only awards on matters which are considered commercial under DRC law will be recognised and enforced under the New York Convention); the principle of non-retroactivity (the New Convention will only apply to awards made after 3 February 2015); and finally, that the New York Convention will not apply to disputes related to immovable property or on a right related to immovable property. This is a particularly significant reservation, as it has potential to bite, for example, on disputes arising from mining rights. Unlike the other three reservations, this reservation is not provided by the New York Convention itself (although not prohibited by it).

I would not call myself an expert in any way, and everyone is free to interpret this as they may, but in my opinion, this is pretty cut and dry; the Board of AVZ has dragged the company into a dispute that even the US State Department says it cannot win. Legal bills are already over $3m, and it begs the question whether the management have either disregarded advice and are proceeding anyway or whether there is some other detail that will override it. But when the actual US Government says it cant be done, I tend to wonder if perhaps there is more to this argument than shareholders are aware of.

I will be interested to see if the new proposed Directors can be elected, because without them Id say the chance of a successful resolution to the case looks dicey. Cash is now $14m down from over $70m a year ago, and as at this rate of spend, the Board will either have to soon raise funds at a massive discount to the suspended price or the company will be out of money and options.