Antilles Gold Limited (ASX: AAU, OTCQB: ANTMF) has announced that it has had two significant wins in its long running disputes with the Dominican Republic Government.
Background
In 2004, a subsidiary of Antilles Gold, EnviroGold (Las Lagunas) Limited (EVGLL), entered into a contract with the Dominican Republic Government entitled, “Special Contract for the Evaluation, Exploitation and Profit from the Las Lagunas Tailings Dam.
According to Antilles, the Special Contract obligated EVGLL to oxidise 5.4 million tonnes of sulphide gold tailings from the Pueblo Viejo mine that were stored in the Las Lagunas dam as the principle element of an environmental remediation program to limit acid mine drainage from the dam, and permitted EVGLL to extract gold and silver from the tailings, with the expectation of a profitable operation.
Antilles alleges that the basic commercial terms were that EVGLL would be exempted from any national or municipal tax, including income tax, but pay to the Government 25% of the cash flow generated after recovery of EVGLL’s investment in the project, plus a 3% royalty on precious metals.
According to Antilles, a condition precedent to the Special Contract was the requirement for EVGLL to gain approval from the Congress of the Dominican Republic for a waiver of taxation, which EVGLL received within the stipulated time frame.
Antilles says that despite these commercial terms being clearly and unequivocally established in the Special Contract, the Government, through its Taxation Department, has for seven years, lodged numerous income tax and asset tax assessments against EVGLL, together with claims for penalties and interest.
According to Antilles, this required EVGLL to defend each assessment in the Dominican Courts, as well as subsequent Appeals by the Taxation Department against Court decisions favourable to EVGLL.
Constitutional Court Ruling
According to Antilles, after losing every Appeal that it had initiated, the Taxation Department ultimately challenged the legitimacy of the Special Contract in the Dominican Constitutional Court.
Antilles says the Constitutional Court has recently posted on its website that it has upheld a previous Supreme Court Judgment in which the Supreme Court acknowledged the tax exempted status of EVGLL under the Special Contract, and also that both the sharing of cash flow and royalties are not taxes but rather considerations to be paid to the Dominican State under the Special Contract.
Antilles says the Constitutional Court Judgement should be issued within two to three weeks.
It said there is no provision for the Government to Appeal decisions of the Constitutional Court.
“EVGLL will claim damages against the Government to recover its legal costs, overheads, and other associated costs related to this matter, and these damages will be added to previous Claims against the Government for their breach of contract with respect to certain obligations under the Special Contract,” Antilles stated,
Arbitration Jurisdiction
According to Antilles, claims against the Dominican Government total approximately A$40 million including legal costs and interest, and are being arbitrated at the International Centre for the Settlement of Investment Disputes (ICSID), which is a unit of the World Bank in Washington DC.
Antilles told the ASX, the Groups’ second win is the recent determination by ICSID that it is the correct jurisdiction for the settlement of disputes, as is clearly documented in the Special Contract.
“Despite this, the Dominican Government chose to challenge ICSID being the jurisdiction and agency for settling disputes, with the challenge recently being dismissed by a unanimous decision of the three member Arbitration Tribunal.
“Arbitration proceedings which were interrupted by the jurisdictional challenge can now continue with ICSID, with its decisions on the Claims expected in June 2023. EVGLL’s London based lawyers who specialise in resolving disputes between investors and Governments, are extremely confident of achieving a positive outcome for the company,” the company said.
For further information please visit: https://antillesgold.net/
