March 13, 2012 / 12:48 AM / in 6 years

Khan Resources hits hurdle in ARMZ litigation

(Reuters) - Canada’s Khan Resources KRI.TO said an Ontario court upheld an appeal from Russian uranium miner Atomredmetzoloto JSC (ARMZ), wherein Khan and its affiliates will not be able to proceed in Ontario with their C$300 million lawsuit.

Khan had sued ARMZ in the Ontario Superior Court of Justice for alleged interference in its Mongolian operations, but the Russian justice ministry had refused to effect service on the state-owned miner in February.

The Canadian uranium miner had said ARMZ sought to eliminate Khan’s mining and exploration licenses in Mongolia so that it could proceed with its own joint venture with Mongolia’s state-owned MonAtom LLC.

“It (the decision) raises the perturbing question as to how a company like ourselves can achieve adequate recourse for its shareholders given the inability to even serve ARMZ with our claim,” Khan’s Chief Executive Grant Edey said in a statement.

The company said it is reviewing the court’s decision and may seek an appeal.

Shares of Khan closed at 17.5 Canadian cents on Monday on the Toronto Stock Exchange.

Reporting by Arnav Das Sharma in Bangalore; Editing by Joyjeet Das

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