Supreme Court says Cabinet broke the law in seizing minority share in Erdenet

The Supreme Court of Mongolia said in a ruling that Cabinet and as an extension the Agency for Policy Coordination on State Property and the General Agency for Intellectual Property and State Registration broke the law when it seized the 49 percent stake of Erdenet from Mongolian Copper Corporation (MCC).

The court ruling comes after a long legal battle between MCC and Cabinet.

“Over the last year-and-a-half, the government has attempted to assume 100 percent ownership of the mine by expropriating MCC’s share through Parliament and government resolutions. MCC challenged the legality of the government’s actions in the Mongolian courts,” MCC said when filing the lawsuit.

MCC filed the lawsuit and requested the court to enforce 13 demands. On April 30, the Administrative Court ruled that both March 2017 and January 2018 government resolutions were illegal and upheld nine of the 13 demands, partially upheld two, and dismissed two.

On July 19, the Appeals Court of the Administrative Court overturned some of the decisions made in April. Five of the 13 demands were upheld by the Appeal Court, while one was partially upheld, and seven of the demands were dismissed.

The Supreme Court upheld six of the 13 demands, partially upheld two demands, and dismissed five demands.

MCC purchased 49 percent of Erdenet Mining Corporation and Mongolrostsetmet LLC (collectively Erdenet) from the Russian state-owned Rostechnology in 2016 with the remaining 51 percent owned by the government.

It is unclear whether the Supreme Court ruling will result in MCC being restored its 49 percent stake in Erdenet. Cabinet appealed to the decision by the Administrative Court in April, but the Supreme Court is the highest court within the hierarchy of courts and its decision is not subject to further review by any other court under Mongolian law.