Khan Resources Inc., the Canadian mining company claiming $104 million from Mongolia for lost licenses, petitioned a U.S. court to weigh in on the protracted dispute.
Khan on June 12 asked the U.S. District Court in the District of Columbia to endorse a compensation package that international arbitrators ruled was owed the company in March.
“The award is due and payable now,” Khan Chief Executive Officer Grant Edey said Monday in a statement. “We continue to seek an amicable basis for the payment.”
The Mongolian government has refused to pay compensation to the Toronto-based company after stripping its uranium mining licenses in 2009, an action Khan fought in the courts for four years. The $100 million in damages awarded by arbitrators is accruing interest at a rate of $6,485 a day, reaching $104.3 million at the end of last week.
The dispute risks deterring investors in Mongolia, which has used last month’s copper-mine deal with Rio Tinto Group to try to woo companies back after foreign direct investment plunged more than 90 percent in two years.
Confirmation of the compensation award would make it executable in the U.S. as a court judgment, Khan said in the statement. Mongolia’s refusal to pay “raises the question of whether investors should be investing in a country that does not respect international arbitration,” Edey said.
Meetings in Ulaanbaatar to resolve the dispute broke down in April. The Ministry of Justice said at the time that Khan had ended negotiations early and it would seek to nullify the award. Khan said it was unaware of any grounds to justify such a move.
Bayartsetseg Jigmiddash, state secretary at the ministry, was unavailable for comment on Monday and didn’t respond to an e-mail.