Source: Mining Weekly                 Date: 10 February, 2011

Russian authorities have blocked a litigation claim against Russian State-owned uranium miner Atomredmetzoloto (ARMZ), the Toronto-listed Khan Resources Company said on Monday. Khan filed a statement of claim against ARMZ and its subsidiary JSC Priargunsky with the Ontario Superior Court of Justice, alleging that ARMZ interfered with its uranium interests in Mongolia, and is seeking damages of CAD300 million.

Because ARMZ is a government-owned company, the service of claim must go through the Russian Ministry of Justice. The statement of claim was translated into Russian and presented to the Ministry on October 28, Khan said. “The Russian Ministry of Justice has notified Khan that it refuses to effect service on ARMZ, citing Article 13 of the Hague Convention,” the firm reported. The article states that “the State addressed may refuse to comply therewith only if it deems that compliance would infringe its sovereignty or security.”

Khan plans to “vigorously” defend its rights and interests, the firm said. “We are disappointed that such extraordinary measures have been resorted to in order to shield ARMZ from commercial litigation,” CEO Grant Edey said. “We are not deterred by this temporary road block and we are considering alternate methods of rendering service to ARMZ.”