Prairie Mining Ltd. has formally commenced international arbitration proceedings by serving Notices of Arbitration under both the Energy Charter Treaty and the Australia–Poland Bilateral Investment Treaty (Treaties) on the Republic of Poland.
Prairie alleged that the Republic of Poland has breached its obligations under the applicable treaties through its actions to block the development of the company’s Jan Karski and Debiensko mines in Poland, effectively depriving Prairie of the entire value of its investments in Poland.
Prairie’s claim for damages may include, but is not limited to the value of Prairie’s historic expenditure in developing both the Jan Karski and Debiensko mines; lots of profits and damages that the company has suffered as a result of Poland’s acts and omissions, which have resulted in the expropriation of both the Jan Karski of Debiensko mines, which is linked to the considerable Net Present Value of both mines at the time of Poland’s international treaty breaches; and accrued interest related to any damages award and all costs associated with pursuing the claims to arbitration.
“Following the announcement in July that the company had secured A$18 million for litigation funding, the filing of the company’s notices of arbitration is the next step forward in its pursuit of damages following actions and omissions by the Republic of Poland, which have prevented Prairie from developing its world-class Jan Karski and Debiensko coking coal projects,” Prairie CEO Ben Stoikovich said. “We have had no option but to take this action and enforce the company’s rights to recover full value for shareholders through international arbitration.”
On July 1, the company executed a Litigation Funding Agreement for A$18 million (US$12.3 million) with LCM Funding UK Ltd. to pursue damages claims in relation to the investment dispute between the company and the Polish government that has arisen out of certain measures taken by Poland in breach of the treaties.
In February 2019, Prairie formally notified the government that there was an investment dispute. Prairie’s notification called for prompt negotiations with the government to amicably resolve the dispute and indicated Prairie’s right to submit the dispute to international arbitration in the event of the dispute not being resolved amicably. The company said it remains open to resolving the dispute with the government amicably. However, the company said the government has declined to participate in discussions.