Court to decide Armeno-Merukh dispute on Monday

The South Jakarta District Court was scheduled to make a final decision on Monday on the dispute between Canadian mining firm Ag Armeno Mines and Minerals Inc. and Indonesian miner Yusuf Merukh over shares in the Batu Hijau gold project in West Nusa Tenggara, the lawyer representing Armeno said.

Rofinus Lubis of Julius Rizaldi and Partners told Petromindo.Com the court had twice delayed making the final decision on the case.

"We don't hope any delay this time," Lubis said.

Armeno, which is listed in the Vancouver Stock Exchange, filed a lawsuit against Merukh, who has 20 percent of the Batu Hijau gold project through his company PT Pukuafu Indah, in July last year in the South Jakarta District Court following the alleged violation of agreement by the latter.

Other owners of PT Newmont Nusa Tenggara, which owns the gold project, is American mining firm Newmont Gold Company (45 percent) and Japanese firm Sumitomo Corporation (35 percent).

Documents obtained by Petromindo said that Armeno and Merukh entered into an agreement in May 1998 under which Armeno was granted the sole and exclusive option to acquire a 18 percent stake in PT Newmont Nusa Tenggara. Merukh will receive 50 million shares in Armeno and US$2 million in cash payment in return.

Under the agreement, Armeno will be allowed to conduct due diligence on the value of the gold project prior to the acquisition.

However, Armeno was not given access to the gold project to conduct the due diligence. It thus filed a suit against Merukh and his company in the Vancouver court on charges that the latter had repudiated his obligations under the agreement.

The Supreme Court of British Columbia decided on January last year in favor of Armeno and ordered Merukh pay compensation to Armeno.

Lubis said the Supreme Court could not ask the Indonesian courts to execute the verdict because Canada and Indonesia have no bilateral agreement obliging the Indonesian courts to execute the decisions made by Canadian courts and vice versa.

As such, Lubis said, Armeno filed a new lawsuit against Merukh and his company in the South Jakarta District Court, demanding Merukh to pay compensation to Armeno. Lubis refused to reveal the amount of compensation.

"We can only present the Vancouver Supreme Court's verdict as an evidence during the hearing of the case," Lubis said.

According to Lubis, the South Jakarta District Court has sequestered Merukh's shares in PT Newmont Nusa Tenggara in August last year at the request of Armeno's lawyers. (*)