Summary

​

TIL has a number of legal claims against the Arab Republic of Egypt (Egypt) which relate to the alleged expropriation of TIL’s Abu Dabbab Tantalum-Tin-Feldspar project (Project) by Egypt in 2015 (Legal Claims) (Spin-out).

In 2017, Arrowhead Resources Limited now called Emerge Gaming Limited ("Arrowhead") and TIL entered into a conditional arbitration funding agreement (Funding Agreement) with a Guernsey based subsidiary of Calunius Litigation Risk Funds (the Funder), under which the Funder has agreed to fund the costs of the Legal Claims.  The conditions have since been satisfied.

Arrowhead and TIL intend to jointly prosecute the Legal Claims against Egypt by way of international arbitration at the International Centre for Settlement of Investment Disputes (ICSID), a World Bank affiliated body in Washington DC.  

TIL has the right to a fixed percentage of any compensation awards resulting from a successful arbitration of the Legal Claims. 

Arrowhead and TIL have entered in to an arbitration management agreement (Management Agreement) to ensure that the new Arrowhead management team is not distracted on non-core activities such as the Legal Claims or financial burdens associated with TIL, enabling them to focus on their new business activities. 

TIL  operates as an independent company, with its main objective to generate value through the Legal Claims on behalf of its shareholders and AR1.

​

Regular updates are available through the official ICSID website:

https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/18/22

​

Background to the Legal Claims

On 26 February 2015 Arrowhead announced a revised development strategy (the 400K Plan) and a conditional financing arrangement for the Abu Dabbab Project (the Project). The 400K Plan and financing arrangements were presented to the Egyptian Company for Mineral Resources (ECMR) which is a division of the Egyptian Mineral Resources Authority, the Government Department responsible for mineral titles and mining developments in Egypt, at meetings in Cairo in March 2015.

In conjunction with the presentation of the 400K Plan proposal to ECMR, Arrowhead entered into a conditional financing arrangement to finance the capital expenditure requirement for Stage 1 (being USD$7,000,000), in return for a 50% interest in TIL. TIL indirectly holds the Arrowhead's 50% interest in the Project through its shareholding in Tantalum Egypt JSC.

This investment in the Project was subject to the satisfaction of customary conditions, including confirmation from the ECMR and the Egyptian Ministry of Investment (GAFI) that Tantalum Egypt JSC (Tantalum Egypt) was in good standing. GAFI is the regulatory authority for Tantalum Egypt and Tantalum Egypt holds the exploitation licences at the Project (refer above).

GAFI approved the renewal of Tantalum Egypt’s work permit for the period 1 January 2015 to 31 December 2015, effectively satisfying the GAFI condition precedent. Despite ECMR's verbal assurances, following a meeting between the Chairman of ECMR and the Chairman of Tantalum Egypt (who was also Arrowhead's representative on the board of Tantalum Egypt), Arrowhead became aware on 26 March 2015, that ECMR was seeking ways to dissolve Tantalum Egypt and to reissue the exploitation licences to a third party, although no formal notice to that effect was ever received by Arrowhead.

Arrowhead requested urgent clarification of ECMR's position but ECMR did not respond to the requests and has not responded to any further requests since that time.  

As the result of ECMR's unwillingness to engage with Arrowhead, Arrowhead suspended further funding into Tantalum Egypt. The Company considers that Egypt, through ECMR and EMRA, has implemented illegal measures to gain full control of Tantalum Egypt's exploitation licences and the Project. The Company considers that Egypt has unlawfully expropriated the Company's investments in the Project, impaired the Company's management, operation and enjoyment of those investments and treated the Company and its investments in a manner that is not fair and equitable.  

​

Current Status 
In late 2015, after failing to solicit any engagement with ECMR, Arrowhead commenced discussions with litigation funding groups seeking financial support to pursue the Legal Claims against Egypt.

The Company has also recently received information that Egypt has been seeking tenders for the acquisition and development of the Project internationally, using the know-how and intellectual property of the Company.

On or about 3 August 2017, Arrowhead and TIL entered into the binding Management Agreement in relation to the arbitration process to pursue the Legal Claims and the distribution of proceeds resulting from a successful arbitration or other settlement (if any). On 4 August 2017, Arrowhead and TIL (together, the Claimant) entered into the Funding Agreement with the Funder, under which the Funder has agreed to fund the Legal Claims. 

​

In April 2018, TIL's legal advisors sought meetings with the Republic of Egypt to discuss the claims.  The Republic of Egypt did not respond to these requests.

​

On 30 May 2018, a Request For Arbitration under the Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID) - Tantalum International Ltd (Australia) and Arrowhead Resources Ltd (Australia) v The Arab Republic of Egypt (Egypt) was lodged.