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Constitutional Court: Nationalization of EMC will require compensation www.gogo.mn
About a year ago, the Parliament issued the 23rd resolution and reached a decision to nationalize the 49 percent ownership of Erdenet Mining Corporation (EMC). Considering this action as a violation to the Constitution of Mongolia, some people have appealed to the Constitutional Court. Accordingly, the Constitutional Court proceeded a ruling yesterday and confirmed the 23rd resolution of the Parliament did not violate the Constitution.
The rapporteur of the Constitutional proceedings was Sugar Dulam, who was one of the people who signed the approval of collateralization of EMC's 51 percent ownership to Standard Bank of South Africa. It has to be noted that Sugar, a member of the Constitutional Court, was the Chairman of the State Property Committee back then.
Looking at the justification of the appealing party, the 49 percent stake of EMC never belonged to the Government of Mongolia. The dispute began when the Government violated the private property rights by nationalizing the 49 percent stake, which was purchased from another country by a private entity.
The Constitutional Court’s ruling of the 23rd resolution of the Parliament:
Article 1.2 states “Democracy, justice, freedom, equality, ... the rule of law are the basic principles of the public service.”
Article 5.2, “The State … accepts any form of private property and protects the rights of ownership”,
Article 5.3, “Rights of the owner may be limited only by the grounds provided by law.”,
Article 16.3, “Fair acquisition, possession and ownership of movable and immovable property is inheritable. It is prohibited to confiscate or requisite private property. If the State takes its private property on the basis of essential social needs, the State shall pay the compensation and the price.”
Article 70.1, “In the Constitution ... decisions of the public body should be fully complied with one another.”
Although it may seem as a property dispute between the Government and private sector, it was a proceeding to decide whether if Mongolia could protect at least half of its ownership or lose 100 percent of its stake.
The London Court of International Arbitration (LCIA) has suspended EMC’s 51 percent due to the claim of Just Group collateralizing the stake to South African Standard Bank. While the company is operating normally, its foreign accounts have been suspended, resulting in a risk of no-income. However, Minister of Justice and Home Affairs Nyamdorj Tsend and Chief of Cabinet Secretariat Zandanshatar Gombojav announced that the factory is facing no risk.
Enkhjargal.B, Tugsbilig.B
Published Date:2018-03-02
