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Cases & Deals

May 25, 2021

King & Spalding Represents an Armenian Client in a US$320 Million Mining Dispute against Russian VTB Group

King & Spalding is representing Mr Valeri Mejlumyan, a prominent Armenian businessman, and his companies in a series of related London High Court and LCIA proceedings concerning the Teghout copper and molybdenum mine in northern Armenia.

Between 2011 and 2016, VTB provided approximately US$300 million in financing to develop a copper and molybdenum mine in the Armenian province of Lori. Under that arrangement, VTB indirectly acquired a nearly 50% interest in the Armenian entity that held the licence, Teghout CJSC (“Teghout”).  The loan was restructured in 2016 through a facility agreement and further security was provided under various pledge and security agreements.

In 2018, VTB alleged Teghout had defaulted on interest payments, as a result of which the bank purportedly exercised its alleged right to take control of Mr Mejlumyan’s indirectly held stake in Teghout and called for an accelerated repayment of the principal debt and remuneration under the facility agreement totalling over US$300 million. This has lead to a number of LCIA and London High Court proceedings, the latest episode of which came in the form of a judgment of Mr Justice Butcher in the London Commercial Court with respect to certain anti-suit proceedings initiated by VTB against Mr Mejlumyan.

A copy of the judgment is available here.