Main trial in arbitration on talc mining ends, verdict in 1.5 years

The decision for the international arbitration between the company EuroGas and Slovakia concerning the withdrawal of the licence for talc mining in Gemerská Poloma should be made in one or 1.5 years at the latest.

Talc mining, illustrative stock photoTalc mining, illustrative stock photo (Source: TASR)

The talc case’s main trial before the World Bank’s international tribunal has already been concluded, Plus 7 Dni weekly writes in its latest issue. The arbitration court is deciding on whether Slovakia will pay for illegally withdrawing the licence from the mining company EuroGas, or if it will win the dispute amounting to €2 billion, wrote the weekly.

An out-of-court agreement involving €420 million compensation is allegedly in play, too, the TASR newswire quoted the weekly.

The issuing of the arbitration tribunal’s ruling will be the next step within the arbitration proceedings, according to the Slovak Finance Ministry. “The ruling is expected to be issued in one to 1.5 years,” the Finance Ministry wrote.

EuroGas also tried to cast doubt on the Slovak party’s witnesses at the arbitration proceedings in Paris, according to Plus 7 Dní. It published on its website a video from the Saint Barbora [patroness of miners] celebrations held in 2015 by Eurotalc, a company that mines talc at the moment. The then-authorised representative of the company and Slovakia’s witness in the arbitration, Ernst Haidecker, claims in the video that they had been stripped of their mining rights in 2011 and that they had to lay off half of their labour force.

EuroGas head Wolfgang Rauball claims this attests to the fact that the arbitration tribunal was deceived during the trial. “In line with Slovak legislation, the mining authority should have announced a new tender,” the weekly quoted him. “In our opinion, the fact that the mining authority has silently and illegally resumed the company’s mining rights is proof of the unlawful and corrupt behaviour of the mining authority based in Banská Štiavnica (Banská Bystrica Region). It is solid proof of what we have been asserting for 10 years.” Eurotalc officials did not want to comment on the ongoing proceedings.

Arbitration proceeding started

The revocation of the licence prompted Rauball, on behalf of EuroGas, to launch arbitration proceedings against Slovakia at the International Centre for Settlement of Investment Disputes (ICSID). As the petitioner in the arbitration, which was launched in 2014, EuroGas is demanding compensation of $3.2 billion (€2.9 billion) from Slovakia for what it calls a marred investment. It is expected that a verdict on the arbitration process could be released in 2017.

No appeal against ICSID decisions is possible, although they can be overturned due to serious procedural flaws.

EuroGas began indicating its plans to take legal action against Slovakia over the loss of the talc quarry in 2010. At first, it demanded compensation of €500 million in 2011. One year later a company called EuroGas Inc., registered in the USA, also began claiming compensation. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the USA from 1991 had been violated. The Slovak Finance Ministry has denied that any such agreement was broken.

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