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This legal dispute concerns shares in what is currently the world's largest lithium deposit (hard rock). AVZ had already obtained the voluntary suspension of share trading some time ago.
The suspension of the shares of AVZ Minerals Ltd. (ASX: AVZ, FSE: 3A2) from stock exchange trading for weeks is due to the arbitration proceedings initiated by Jin Cheng Mining before the International Chamber of Commerce in Paris. AVZ Minerals published a new update on this procedure and the current status of the legal dispute this week.
In the dispute with Jin Cheng Mining, which is being heard in Paris by a single judge, he has issued Rules of Procedure No. 1-3. It is in favour of AVZ International, the 100% subsidiary of AVZ Minerals. In the next step, the arbitral tribunal will now negotiate and decide on the challenge to AVZI's jurisdiction.
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Specifically, this point concerns the controversial question of whether or not AVZI's contractually established pre-emption rights for a further 15 percent of the Manono project were safeguarded. The arbitral tribunal intends to hear and decide this issue before dealing with the further question of whether or not the case as a whole is well-founded.
It is unpleasant from the point of view of the invested investors that the timetable for further negotiations before the International Court of Arbitration in Paris has still not been set by the competent judge. Investors must therefore continue to be patient and wait, because AVZ Minerals does not yet have reliable information about the further timing of the negotiations.
AVZ Minerals considers the decision of a Congolese court to be irrelevant
On 20 September 2022, a DRC tribunal issued a decision regarding an application by Dathomir Mining Resources SARL. In these proceedings, Dathomir had requested that the SPAs for the 15% stake in Dathcom acquired by AVZ Minerals be reassessed and cancelled.
The defendants of Dathomir, namely AVZ International, Dathcom, Cominière and Rawbank SA, were not present in these proceedings before the Congolese court. They were neither heard by the court nor involved in the proceedings. The background to this process is that Dathomir is seeking to cancel the old contracts signed by AVZ International to buy the 15% stake in Dathcom, the company that operates the Manono Lithium Project.
Location of the Manono lithium deposit in Congo with the
possible transport routes for the lithium and tin products
In this context, the contractually payable purchase prices should also be temporarily suspended and postponed until arbitration proceedings have been concluded. AVZ International and also the project company Dathcom deny that the factual conditions for Dathomir's application were met, because by August 2021 AVZ International had properly concluded each of the contractually stipulated SPAs and also made the associated payments on time.
A judgment that simply overlooks essential aspects of the contracts concluded.
Thus, not only the purchase of the shares was completed and processed in accordance with the contract. The DRC tribunal also found that the two Dathomir SPAs contain arbitration agreements. Should disputes arise over the execution of the purchase, they would therefore not have to be resolved before a Congolese court, but in separate arbitration proceedings.
However, AVZ Minerals is not aware that such arbitration proceedings have been initiated in the meantime. Therefore, AVZ Minerals considers the hearing before the Congolese court to be immaterial because it has no effect on the validity of the Dathomir SPAs that AVZ International has already concluded in the Democratic Republic of Congo and which also comply with the law of the DRC.
AVZ Minerals therefore continues to believe that, through Dathcom, it is the legal owner of a 75% interest in the Manono Lithium Project and holds all rights thereto, as the purchase price has been paid in full and all obligations associated with the purchase have been fully satisfied. At the same time, the SPAs were not terminated or cancelled by AVZ Minerals, AVZ International or third parties.
An object of desire: lithium-rich spodumene mineral
Still no comment from AVZ Minerals on social media claims
Normally, in this legal dispute, it is not AVZ Minerals' policy to comment on rumors spread on social media. In recent months, there have been numerous statements that the company can only describe as false or misleading. In the case of individual remarks, the question even arises as to whether they were not even made with deliberately deceptive intent.AVZ Minerals will therefore continue not to react to these speculations and assumptions. However, the Company reserves the right to make a statement on a particular matter if AVZ believes it is obliged to do so at that time.
