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Dixon-Warren takes on Norilsk

Publishing Date : 14 August, 2018

Author : TSAONE SEGAETSHO

BCL Liquidator Nigel Dixon-Warren has absolved government of any wrong doing, saying the company should rather take him on. This is after last month mining giant Norilsk Nickel released a statement attacking the Botswana Government for what it concluded as a mischievous attempt by Botswana of failing to pay for a mine it contractually purchased before subsequently putting it under liquidation with chicanery.


Norilsk painted Botswana with a dark brush of “disdain for investors’ rights.” Botswana is yet to respond to the statement as even media requests regarding Norilsk’s words remains pending. Dixon-Warren told Business Post this week that it is not fair to blame Botswana Government for bad investor relations because in the first place the BCL-Norilsk contract for purchase of the Nkomati and Tati mines were never put in force or effected but was just hanging on the air.


The statements by Norilsk against Botswana could harm Botswana’s reputation as an investment hub and mar President Mokgweetsi Masisi’s efforts to enhance Foreign Direct Investment according to many observers. The gripe of Norilsk against Botswana or BCL is a matter of a legal matter betters the courts in different jurisdictions, London, South Africa and Botswana. Norilsk is suing government of Botswana for breach of purchase contract, alleging that Botswana Government failed to pay about P2.8 billion for purchase of Nkomati and Tati mines.


 Norilsk said it sought to apply to Botswana courts to have its case heard by impartial and international arbitration in 2016 and the Botswana courts took 16 months to deny them the application. Norilsk is currently attempting to appeal the Botswana court decision.  The Botswana High Court however ruled that Norilsk had not complied with the legal requirements of applying for leave to pursue the case abroad, therefore dismissed the Russian company’s case.


Meanwhile Dixon-Warren has also launched a concurrent case against Norilsk at the Gauteng High Court challenging the legality of purported transfer of shares from Norilsk to BCL. As it has also been alleged that the transfer was approved by then mineral resources minister Mosebenzi Zwane, Dixon-Warren is challenging those allegation too.


While Norilsk also blames the Botswana courts of also refusing to have the company take its case to London Court of International Arbitration, Dixon-Warren argued that Norilsk wanted to omit Botswana courts legal proceedings and drag Government to the London Court of International Arbitration. He said any legal action against an insolvent company can only be pursued after obtaining leave of the High Court of Botswana to do so and such legal provisions are common around the world.


The BCL liquidator also believes Botswana courts were being robust and firm not to be taken from pillar to post by the Russian company. “Norilsk is free to withdraw its action at the LCIA, and approach the High Court to obtain the necessary leave prior to re-commencing action at the LCIA. There has been no attempt by the Botswana Government to preclude Norilsk from taking any legal actions it deems fit. The matters mentioned above are between Norilsk and the Liquidator of BCL,” said Dixon-Warren.


Dixon-Warren told this publication that when going back to this deal, it is clear that BCL was not in a position to conclude the acquisition of Nkomati. He said Norilsk is entitled to pursue a sale of its interests to a third party, and in the event it has suffered damages as a result of BCL not performing under the agreement, would be entitled to make a claim against BCL under the insolvency laws.
 

“BCL was placed into liquidation as it was fatally insolvent, and without further significant injections of funding, was unable to continue operating. I understand that Government considered requests by Management for additional funding immediately prior to liquidation, and concluded that it could no longer provide financial support to the detriment of other pressing budgetary requirements.


The date of liquidation (October 2016), the agreement (Norilsk-BCL) was not in force and had not been concluded. No guarantees were issued by Government of Botswana in respect of these transactions, and both BCL and Norilsk were fully aware at the time of signing the agreement that BCL was to raise its own funding for the acquisitions. Government has no legal obligation to settle the debts of any party in relation to the BCL liquidation," said the BCL liquidator.


Meanwhile, Dixon-Warren has revealed in an interview that at least two experienced and big companies are talking to him with keen interest on BCL. He said in there were about 140 companies and individuals who came with interest but never came back when he asked them on their capacity to buy or experience on mining projects. Dixon-Warren said some come to him interested in the mine’s waste dump to process it and some are interested in mining machinery.


He said most are skeptical of the value of BCL as a big old mine which might be difficult to run and close if there is a need. Dixon-Warren said currently he is working on cleaning up and pumping water from the mine. He said they are working on a hydro-geological process of taking out 6 litres of contaminated water from the mine. About 180 people have been employed to drain the water and work on maintaining the waste dump. He said BCL is a big old mine and people should know it is going to take a long time to be sold or closed.

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