Cases & Deals

Metals and Mining

World Wide Minerals obtains arbitration award in excess of $50 million against the Republic of Kazakhstan

Client(s) World Wide Minerals Ltd.

Jones Day obtained an arbitration award on behalf of World Wide Minerals Ltd. ("WWM"), a Toronto-based mining company, and Mr. Paul A. Carroll, QC, WWM's President and CEO, which held that the Republic of Kazakhstan breached international law and the Canada-U.S.S.R. Bilateral Investment Treaty ("BIT") over 20 years ago. The award, issued on October 29, 2019, granted WWM more than U.S. $40 million in damages, as well as a substantial costs award of over U.S. $8 million, for a total award in excess of U.S. $50 million.

Based upon its multi-million dollar investment in 1996-1997, WWM managed and operated one of the largest uranium-processing facilities in the former Soviet state. It entered into a number of agreements with the Republic of Kazakhstan whereby the government promised its full cooperation in the venture, and WWM invested millions of dollars to repair and modernize the country's uranium processing facilities and to finance mineral production. Soon thereafter, the Republic of Kazakhstan breached its contractual obligations to WWM and imposed upon it restrictions that frustrated the object and purpose of those contracts—ultimately leading to the suspension of operations at WWM's facility, and the bankruptcy, confiscation, and forced sale of its assets by the state. According to Mr. Carroll, the arbitral claim sought to "hold Kazakhstan accountable for its deliberate acts and omissions that deprived WWM of its substantial investment in the country."

Retained as counsel to WWM in November 2013, Jones Day teamed up with Judge Stephen M. Schwebel, former President Judge of the International Court of Justice, and Professor Malcolm Shaw Q.C. of Essex Court Chambers, to argue the legal point of Kazakhstan's obligations under the Canada-U.S.S.R. BIT. The Government of Canada also intervened in the matter with an amicus submission, supporting the conclusion that Kazakhstan succeeded to the treaty. The tribunal, comprised of Sir Franklin Berman QC, Professor John Crook and Professor William W. Park, concurred in a Partial Award on Jurisdiction issued in October 2015, opening the door for WWM to make its claims against Kazakhstan, even without a new treaty in force with the now-independent CIS State.

In its Award on the Merits of 29 October 2019, the tribunal held that the respondent's failure to grant it a uranium export license in accordance with Kazakhstan's established procedures, and to instead substitute those established procedures with an arbitrary and ad hoc process that ultimately allowed state-owned rivals (KATEP and Kazatomprom) to defeat their application, constituted a clear breach of the respondent's fair and equitable treatment obligations under the treaty. This led to the claimants being granted a recovery of their investment in Kazakhstan (which, with interest, amounts to over U.S. $40 million) and recovering a substantial portion of their legal costs and fees.