June 29 (SeeNews) - Canada's Gabriel Resources, which holds a licence for the Rosia Montana gold and silver mine in Romania, said on Thursday it plans to file a $4.4 billion (3.85 billion euro) arbitration claim against Romania for alleged investment treaty violations.
"By licensing and then blocking the implementation of the projects, without due process and without compensation, Romania has deprived Gabriel entirely of the use, benefit and value of its investments in Romania, including its rights to develop the projects," Gabriel Resources said in a press release.
Gabriel Resource's claim is based on violations by Romania of several provisions of the treaty: the expropriation of the company's investments in Romania without compensation, the failure of the state to accord to its investments fair and equitable treatment and full protection and security and the impairment of the company's investments by discriminatory and unreasonable measures.
The company said it will submit to the World Bank's International Centre for Settlement of Investment Disputes (ICSID) a memorial which will detail factual and legal arguments supporting its claim against Romania and the quantum of the damages sustained.
"The Romanian Government unlawfully blocked the permitting of the Rosia Montana Project and then acted in manifest disregard of Gabriel’s agreement with the State and existing license rights. The actions of the Romanian Government are tantamount to expropriation of Gabriel’s investments in Romania," Gabriel Resources president and CEO Jonathan Henry said.
As part of the next steps in the ICSID process, Romania must file its response to Gabriel's memorial by February 15, 2018 and then Gabriel must file a reply to Romania's counter memorial by September 5, 2018 which Romania has to respond to again by February 19, 2019.
A hearing on the merits of the claim before the tribunal is scheduled to occur from September 9 to 20, 2019.
Gabriel is a Toronto Stock Exchange listed Canadian resource company whose main focus has been the exploration and development of the Roșia Montana project in Romania, one of the largest undeveloped gold deposits in Europe.
In August 2013, the Romanian government approved a draft law supporting the Rosia Montana gold and silver project, which is majority owned by Gabriel Resources. That move sparked massive protests in Bucharest and other major cities as the exploitation envisages the use of cyanides to extract gold, a process that is considered potentially harmful for the environment. The Romanian parliament subsequently rejected the draft law in 2014.
In 2015, the company announced it will seek international arbitration at ICSID in hope to settle a satisfactory agreement with Romania.
Gabriel owns 80.46% of the Rosia Montana gold project in Romania through its local subsidiary, Rosia Montana Gold Corporation SA while the country's government holds a 19.31% stake.
($ =0.8759 euro)