The Government of Uzbekistan Targets Foreign Investor Oxus Gold Plc With Resource Nationalism

LONDON, May 9, 2011 /PRNewswire/ -- The Government of Uzbekistan has distributed false and misleading statements about one of the country's largest foreign investments, say lawyers for Oxus Gold PLC (Oxus). On 5 May 2011, unfounded statements were made to the press that Oxus had violated tax regulations in an attempt to force the Amantaytau Goldfields A.O. (AGF) joint venture into involuntary liquidation.

"It is a clear indication of the type of government we are dealing with in Uzbekistan," said Robert Amsterdam, lawyer to Oxus, a 50% shareholder in AGF. "Oxus has been resisting the government's demands to liquidate which have been coupled with an ongoing campaign to fabricate a reason to steal the last foreign assets in the mining industry in Uzbekistan."

After many years as one of the country's success stories, Oxus has been targeted by the Government of Uzbekistan, says Amsterdam, "The Government has already run out of the country other foreign investors in the mining sector."

As a consequence of the illegal conduct of the Uzbek government, Oxus initiated international arbitration proceedings on 3 March 2011 pursuant to an investment treaty between the governments of Uzbekistan and the United Kingdom. As required by the treaty's provisions, Oxus is currently pursuing good faith efforts for a specified period to resolve the dispute amicably. However, the Government of Uzbekistan has expressed no interest in even discussing the issues with Oxus.

The Government of Uzbekistan's campaign against Oxus took a dramatic turn in March 2011 when it commenced an onerous audit of AGF's financial and economic activities and cut off all access by Oxus to AGF's operations. This unwarranted action forced Oxus to declare force majeure in respect of its obligations towards the joint venture. Meanwhile, the actions of the Government have compelled virtually all Oxus personnel to flee Uzbekistan.

Oxus will defend itself in international forums to the full extent of the law, and will continue to advise the international investment community so that foreign companies evaluating Uzbekistan as a potential investment destination are able to meaningfully assess the risks of doing business with a government whose interest in legal measures derives from commodity prices rather than the rule of law.

CONTACT: James Kimer (jkimer@amperlaw.com, +19173550717)