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Form 8-K for GLOBAL GOLD CORP
________________________________
21-Nov-2013
Other Events
Item 8.01 Other Events
On November 21, 2013, the Company received from its attorneys the
"without prejudice" ruling of the Judge J. Paul Oetken of United
States District Court for the Southern District of New York which
vacated the $37.5 million default judgment which the Company had
obtained against former Armenian Minister of Environment Vartan
Ayvazian solely on jurisdictional grounds. The ruling is expressly
"without prejudice" to Global Gold's right to re-file or continue to
pursue the case, and the Company is currently reviewing its legal
options. The court did not rule on the corruption charges or damage
amount caused by Ayvazian's actions, basing its findings on Ayvazian's
general insufficient contacts with New York. One of the shareholders
of the Armenian party to the agreement under which the Company brought
suit against Ayvazian identified him as the undisclosed principal who
controlled the transaction and divided the funds paid by Global Gold.
The November 21, 2013 court ruling also did not address those facts.
This ruling has no effect on the Company's financial statements as
this judgment was never recorded on the Company's books.
As previously reported, in 2006, GGH, which was the license holder for
the Hankavan and Marjan properties, was the subject of corrupt and
improper demands and threats from the now former Minister of the
Ministry of Environment and Natural Resources of Armenia, Vardan
Ayvazian. Specifically, the Company was asked to pay a $3 million
bribe which it refused to pay. The Company reported this situation to
the appropriate authorities in Armenia and in the United States. On
November 7, 2006, the Company initiated the thirty-day good faith
negotiating period (which is a prerequisite to filing for
international arbitration under the 2003 SHA, LLC Share Purchase
Agreement) with the three named shareholders and one previously
undisclosed principal, Mr. Ayvazian. The Company filed for arbitration
under the rules under the International Chamber of Commerce,
headquartered in Paris, France ("ICC"), on December 29, 2006. On
September 25, 2008, the Federal District Court for the Southern
District of New York ruled that Mr. Ayvazian was required to appear as
a respondent in the ICC arbitration. On September 5, 2008, the ICC
International Court of Arbitration ruled that Mr. Ayvazian shall be a
party in accordance with the decision rendered on September 25, 2008
by the Federal District Court for the Southern District of New York.
Subsequently, in December 2011 the ICC Tribunal decided to proceed
only with the three named shareholders; in March 2012, GGM filed an
action in Federal District Court pursuant to that Court's decisions
for damages against Ayvazian and/or to conform the ICC Tribunal to the
precedents, and on July 11, 2012 the Federal Court entered judgment in
favor of the Company, which was not appealed and became final. Based
on the evidence of the damages suffered as a result of Ayvazyan's
actions, the final $37,537,978.02 federal court judgment in favor of
GGM was comprised of $27,152,244.50 in compensatory damages plus
$10,385,734.52 of interest at 9% from 2008. The Company notified the
ICC that the pending arbitration against the other three shareholders
should be terminated as moot, considering the judgment against
Ayvazian. The ICC complied with the Company's request and terminated
that proceeding.
Separately, and based on the US Armenia Bilateral Investment Treaty,
Global Gold filed a request for arbitration against the Republic of
Armenia for the actions of then Minister of Environment and Natural
Resources Ayvazian with the International Centre for Settlement of
Investment Disputes, which is a component agency of the World Bank in
Washington, D.C. ("ICSID"), on January 29, 2007. On August 31, 2007,
the Government of Armenia and GGM jointly issued the following
statement, "[they] jointly announce that they have suspended the ICSID
arbitration pending conclusion of a detailed settlement agreement. The
parties have reached a confidential agreement in principle, and
anticipate that the final settlement agreement will be reached within
10 days of this announcement." GGM entered into a conditional,
confidential settlement agreement with the Government of the Republic
of Armenia to discontinue the ICSID arbitration proceedings, which
were discontinued as of May 2, 2008. The November 21, 2013 "without
prejudice" ruling does not affect the ICSID settlement.
--
GLOBAL GOLD MINING LLC, ARMENIAN BRANCH
Yerevan 0009 Armenia, Str. Zaroubian 1/1
www.globalgoldcorp.com
E-mail: [email protected]
Form 8-K for GLOBAL GOLD CORP
________________________________
21-Nov-2013
Other Events
Item 8.01 Other Events
On November 21, 2013, the Company received from its attorneys the
"without prejudice" ruling of the Judge J. Paul Oetken of United
States District Court for the Southern District of New York which
vacated the $37.5 million default judgment which the Company had
obtained against former Armenian Minister of Environment Vartan
Ayvazian solely on jurisdictional grounds. The ruling is expressly
"without prejudice" to Global Gold's right to re-file or continue to
pursue the case, and the Company is currently reviewing its legal
options. The court did not rule on the corruption charges or damage
amount caused by Ayvazian's actions, basing its findings on Ayvazian's
general insufficient contacts with New York. One of the shareholders
of the Armenian party to the agreement under which the Company brought
suit against Ayvazian identified him as the undisclosed principal who
controlled the transaction and divided the funds paid by Global Gold.
The November 21, 2013 court ruling also did not address those facts.
This ruling has no effect on the Company's financial statements as
this judgment was never recorded on the Company's books.
As previously reported, in 2006, GGH, which was the license holder for
the Hankavan and Marjan properties, was the subject of corrupt and
improper demands and threats from the now former Minister of the
Ministry of Environment and Natural Resources of Armenia, Vardan
Ayvazian. Specifically, the Company was asked to pay a $3 million
bribe which it refused to pay. The Company reported this situation to
the appropriate authorities in Armenia and in the United States. On
November 7, 2006, the Company initiated the thirty-day good faith
negotiating period (which is a prerequisite to filing for
international arbitration under the 2003 SHA, LLC Share Purchase
Agreement) with the three named shareholders and one previously
undisclosed principal, Mr. Ayvazian. The Company filed for arbitration
under the rules under the International Chamber of Commerce,
headquartered in Paris, France ("ICC"), on December 29, 2006. On
September 25, 2008, the Federal District Court for the Southern
District of New York ruled that Mr. Ayvazian was required to appear as
a respondent in the ICC arbitration. On September 5, 2008, the ICC
International Court of Arbitration ruled that Mr. Ayvazian shall be a
party in accordance with the decision rendered on September 25, 2008
by the Federal District Court for the Southern District of New York.
Subsequently, in December 2011 the ICC Tribunal decided to proceed
only with the three named shareholders; in March 2012, GGM filed an
action in Federal District Court pursuant to that Court's decisions
for damages against Ayvazian and/or to conform the ICC Tribunal to the
precedents, and on July 11, 2012 the Federal Court entered judgment in
favor of the Company, which was not appealed and became final. Based
on the evidence of the damages suffered as a result of Ayvazyan's
actions, the final $37,537,978.02 federal court judgment in favor of
GGM was comprised of $27,152,244.50 in compensatory damages plus
$10,385,734.52 of interest at 9% from 2008. The Company notified the
ICC that the pending arbitration against the other three shareholders
should be terminated as moot, considering the judgment against
Ayvazian. The ICC complied with the Company's request and terminated
that proceeding.
Separately, and based on the US Armenia Bilateral Investment Treaty,
Global Gold filed a request for arbitration against the Republic of
Armenia for the actions of then Minister of Environment and Natural
Resources Ayvazian with the International Centre for Settlement of
Investment Disputes, which is a component agency of the World Bank in
Washington, D.C. ("ICSID"), on January 29, 2007. On August 31, 2007,
the Government of Armenia and GGM jointly issued the following
statement, "[they] jointly announce that they have suspended the ICSID
arbitration pending conclusion of a detailed settlement agreement. The
parties have reached a confidential agreement in principle, and
anticipate that the final settlement agreement will be reached within
10 days of this announcement." GGM entered into a conditional,
confidential settlement agreement with the Government of the Republic
of Armenia to discontinue the ICSID arbitration proceedings, which
were discontinued as of May 2, 2008. The November 21, 2013 "without
prejudice" ruling does not affect the ICSID settlement.
--
GLOBAL GOLD MINING LLC, ARMENIAN BRANCH
Yerevan 0009 Armenia, Str. Zaroubian 1/1
www.globalgoldcorp.com
E-mail: [email protected]