Companhia
Mineira de Naburi (“CMdN”)
- Withdrawal of UK Court Appeal after Pathfinder Minerals demands more than £1m in security for costs in order to stifle the Appeal
- Mozambique Injunction continues with suspensive effect
- Derisory $1m offer recently sent by Nick Trew to General Veloso
In response to
the Appeal of the UK Court judgement by the owners of CMdN, General Veloso and
Diogo Cavaco, Pathfinder Minerals filed
an application to the UK High Court demanding that General Veloso and Diogo
Cavaco:
1.
agree to provide over £1m of security for costs; and
2.
drop their legal proceedings in Mozambique
if they wished to proceed with their
appeal.
This is a clear attempt to stifle the appeal and deny them justice. Clearly General Veloso and Diogo Cavaco
cannot provide such an extraordinary amount of costs nor will they or should
they be obliged to give up their defence of their legal rights in the
Mozambique courts. They have therefore decided
to withdraw their appeal in the UK Court.
Mozambique Injunction and
Mozambique legal proceedings
In May 2012, General Veloso and Diogo Cavaco obtained an Injunction in
Mozambique preventing Pathfinder Minerals continuing or taking any further legal
action in UK until a final judgement on the dispute had been reached by the
Mozambique Courts.
This Injunction was confirmed by the Mozambique court with suspensive
effect on 27 March 2013 meaning:
1.
Pathfinder Minerals’ UK court judgement is unenforceable
2.
It was obtained in criminal breach of a Mozambique
Injunction
General Veloso and Diogo Cavaco intend to pursue vigorously in the
Mozambique courts the substantive claims served on Pathfinder Minerals to
confirm that General Veloso and Diogo
Cavaco are the owners of CMdN.
Derisory offer from Nick
Trew and the Board of Pathfinder Minerals sent to General Veloso
During the week of 18 March 2013 General Veloso was sent an offer by
Nick Trew, through an intermediary, to settle the dispute. This offer purported to be from the Board of
Pathfinder Minerals although it was not on their letterhead or signed by them.
This offer proposed that General Veloso should accept $1m as an
immediate payment in respect of the $9.9m that has never been paid for the
shares of CMdN. Nick Trew claimed that
the reason for this derisory offer was that “because of the expenditure on the
legal and related costs….Pathfinder is not able to offer any greater advance..”
In any case, General Veloso and Diogo Cavaco have legally cancelled in
November 2011 the contracts entered into in 2005 under which Pathfinder
Minerals acquired an option to purchase the shares of CMdN, for non-performance
and breach of contract. They expect this
to be confirmed by the Mozambique court in due course.
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Notes for Editors:
In the High Court judgement
obtained by Pathfinder Minerals in October 2012, the judge correctly found that
the Share Option Agreement by which Pathfinder Minerals claimed to own shares
of CMdN was indeed an option agreement, under which the option could only be
exercised upon payment of the purchase price of $9.9m, which has not been paid.
Accordingly, under Mozambique law ownership of CMdN shares never passed to Pathfinder
Minerals.
To this day, the promoters of Pathfinder Minerals,
Nick Trew, Gordon Dickie, John McKeon and Tim Baldwin have only ever paid
$100,000 in respect of the Option Agreement entered into in good faith by
General Veloso and Diogo Cavaco in 2005.
The owners remain highly
confident however that while it is likely to take several years for this case
to be finally resolved, they will be successful in defending their rights of
ownership under Mozambique law.
Appendix
– Grounds of the UK Court Appeal
The owners of CMdN, General Veloso and Diogo Cavaco, applied to appeal
the UK court judgement obtained by Pathfinder Minerals on the grounds primarily
that:
(1) The UK Court
failed to take any or any sufficient notice of the fact that the proceedings in
England were being conducted by the Claimants in breach of the clear terms of a
subsisting anti-suit injunction issued by the Maputo Court in Mozambique so
that according to the provisions of the Mozambique Code of Civil Procedure, the
English judgment could not and would not be recognized by the Mozambique Court.
(2) The judge
also failed to give any or any due consideration or weight to the following:
(a)
that the dispute concerned shares of a Mozambique
company, claims regarding a Mozambique asset, ownership by Mozambique nationals
and a company Companhia Mineira de Naburi (“CMdN”) all of which is governed by
the Mozambique Civil Code;
(b)
that the outcome would and could ultimately only be
subject to decisions made in the Mozambique court, and that only the decision
of the Mozambique Court could have any practical effect, so that the English
proceedings served no useful purpose; and
(c)
the proceedings in England involved an unnecessary
and wasteful duplication of costs which it was unreasonable to expect foreign
litigants to incur in addition to the costs they were obliged to incur in the
litigation in Mozambique where matters ultimately fell to be decided and any legal
decision implemented.
(3) In summary, by
proceeding with the trial and making the orders he did, despite his finding
that the option requiring Pathfinder Minerals to pay $9.9m to the owners of
CMdN had not been exercised under the Share Option agreement and that there was
an anti-suit injunction and continuing proceedings in Maputo, the judge failed
to deal with the case justly and fairly.
