Fox Marble Holdings PLC Arbitration Claim against the Republic of Kosovo (2470L)
September 04 2019 - 9:10AM
UK Regulatory
TIDMFOX
RNS Number : 2470L
Fox Marble Holdings PLC
04 September 2019
Fox Marble Holdings plc
("Fox Marble" or the "Company")
Fox Marble launches EUR195m international arbitration claim
against the Republic of Kosovo
Fox Marble, the AIM listed company focused on marble quarrying
and processing in Kosovo and the Balkans region, has today launched
United National Commission on International Trade Law international
(UNCITRAL) arbitration proceedings, against the Republic of Kosovo
for damages in excess of EUR195 million, as a result of the failure
of the State to protect Fox Marble's rights over the Malesheva
quarry.
The Company is represented by its legal advisers, Stephenson
Harwood LLP, as well as its Kosovan lawyers. As the Company
believes the Kosovan Government to be in clear breach of its
responsibilities towards the Company which is a foreign investor in
Kosovo, the Company is of the opinion that this action is in the
best interests of its shareholders and employees and anticipates a
fair and satisfactory resolution.
All the Company's other operations, including the quarries and
processing factory in Kosovo and the Prilep quarry in Northern
Macedonia, are unaffected.
As was announced on 26 June 2019, the sellers of Green Power
Sh.p.k ("Green Power"), the licence holding partner of Fox Marble's
Malesheva quarry, and Scope Sh.p.k ("Scope") reneged on the
agreement, announced on 4 April 2019, for Fox Marble to purchase
these assets.
Since then Fox Marble has been working to resolve the dispute
concerning the purchase of Green Power and Scope with the
appropriate Kosovan Government agencies, namely the Kosovo mining
regulator, the Independent Commission of Mines and Mineral ("ICMM")
and the Agjencia e Regjistrimit të Bizneseve ("ARBK"), the Kosovo
business registration agency. However, in what is a clear breach of
Kosovo Law 04/L-220 "On Foreign Investment" (2014), Fox Marble has
been prevented from asserting its rights in these matters. This is
a law that should provide extensive protection to foreign
investors, such as Fox Marble, and promises even handedness in the
treatment of foreign investors and local businesses.
The Company has presented detailed evidence to the ICMM that it
holds the relevant rights to grant develop, exploit and operate its
Malesheva quarry to Fox Marble Kosova Sh.p.k ("FMK"), Fox Marble's
local subsidiary, which has been the case since 2015. However, as
disclosed on 18 July 2019, operations at the Malesheva quarry were
suspended. Numerous procedural and legal channels open to it in
Kosovo to have failed to bring the matter to a satisfactory
conclusion.
The Company has also presented the ICMM with detailed evidence
of its purchase of Green Power and Scope and shown that their
owners had no basis to rescind the share purchase agreements.
Despite the cumulative weight of evidence, Fox Marble was denied
the right to appeal any decision relating to the Malesheva quarry
in direct contravention of the provisions of the Kosovo foreign
investment law, Law 04 /L-220 as well as its own rules and
procedures.
In parallel to its efforts with the ICMM, Fox Marble has made
repeated attempts to register the transfer of ownership of Green
Power and Scope at the ARBK. This agency has the established
authority to accept the valid share purchase agreements as evidence
of ownership. However, the ARBK has rejected Fox's application to
register the change of ownership in direct contravention of the
provisions of the Kosovo foreign investment law.
As a direct consequence of the ARBK and ICMM decisions, the
Company has brought arbitration proceedings against the Republic of
Kosovo pursuant to Article 16 of the Kosovo foreign investment law
(as above). The basis of the claim for damages is the investment
made to date in the Malesheva quarry, loss of future revenues
associated with the site and future investment plans in Kosovo.
Significant future investment plans are the subject of the MOU
signed in October 2016 by the Government of Kosovo and Stone
Alliance LLC which is majority owned by Fox Marble
Chris Gilbert, CEO, commented, "Fox Marble has always sought to
work in partnership with Kosovo and its government. We have
therefore taken this step with the greatest reluctance, but the
current circumstances and decisions made have left us with no
choice. There has been a clear failure by the Kosovo government and
its agencies to apply their own laws and regulation in a fair and
equitable manner. It is beyond doubt that Fox Marble has a strong
case. I am confident that the claim will be decided in our favour
and that the award obtained will protect our investment, our
shareholders and show that Kosovo is a place where international
businesses can invest."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
For more information on Fox Marble please visit
www.foxmarble.net or contact:
Fox Marble Holdings plc
Chris Gilbert, Chief Executive Officer Tel: +44 (0) 20 7380
0999
Fiona Hadfield, Finance Director Tel: +44 (0) 20 7380
0999
Brandon Hill Capital (Joint Broker)
Oliver Stansfield Tel: +44 (0) 20 3463
Optiva Securities (Joint Broker) 5000
Christian Dennis/Jeremy King Tel:+44 (0) 20 3137
1902
Cairn Financial Advisers LLP (Nomad)
Liam Murray/Sandy Jamieson Tel: +44 (0) 20 7213
0880
Notes to Editors:
Fox Marble (AIM: FOX), is a marble production, processing and
distribution company in Kosovo and the Balkans region.
Its marble products, which includes Illirico Bianco, Illirico
Selene, Grigio Argento and are gaining sales globally both to
international wholesale companies as well as being supplied
directly into luxury residential properties. In the UK these
include among others St George's Homes and Capital and Counties
Plc's Lillie Square development. In Sydney, Australia Rosso Cait,
Alexandrian White and Breccia Paradisea marble have been used in
what is expected to be Australia's most expensive residential
property. These sales serve to demonstrate the desirability of
Fox's premium marble products as the stone of choice in some of the
most prestigious and expensive residential developments around the
world.
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END
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