Brother of UK Prime Minister puts Mongolia on notice of treaty-based dispute www.iareporter.com
IAReporter has learned that Mongolia has been put on notice of a treaty-based dispute by Maximilian Johnson (the half-brother of UK Prime Minster Boris Johnson) and a related Malaysian entity (GRF Paragon).
IAReporter has confirmed that the notice of dispute was submitted to Mongolia on July 27, 2022, under the Mongolia-UK and Mongolia-Malaysia bilateral investment treaties (BITs). The claimants are understood to allege a denial of justice at the hands of local authorities in relation to a criminal complaint filed by the claimants for alleged fraud, embezzlement, and money laundering by their local business partner.
IAReporter understands that the underlying dispute concerns the claimants’ investment in a local mining company, Zasagchandmani Mines. The claimants (acting together with former Glencore chairman Simon Murray) are said to have, between 2016 and 2018, advanced certain loans to Zasagchandmani Mines that were intended to be used for the purposes of the local mining enterprise. The claimants allege that these funds were subsequently misappropriated by Zasagchandmani Mines’ majority shareholder, Buyantogtokh Dashdeleg, and his associates.
In early 2019, the claimants filed a criminal complaint in relation to the alleged misappropriation of funds, leading to Mr. Dashdeleg being initially subject to a travel ban. However, this travel ban was lifted in late 2019 by a local district court, allegedly in violation of Mongolian law. While the order lifting the travel ban was subsequently nullified, Mr. Dashdeleg had by then left the country, according to the claimants. (According to one report, an Interpol Red Notice warrant was subsequently issued against Mr. Dashdeleg, although Interpol’s database appears to indicate that the warrant is no longer active.)
IAReporter understands that the claimants further allege that their case against Mr. Dashdeleg has been going back and forth between various Mongolian administrative authorities, in particular the Mongolian Central Investigation Bureau and the Public Prosecutor’s Office.
While the Public Prosecutor’s Office eventually in early 2022 issued an indictment against Mr. Dashdeleg’s associates and Zasagchandmani Mines, the claimants say that the Prosecutor failed to effect service on the defendants in Mongolia. Finally, in June of 2022, the Prosecutor is said to have annulled the indictment and once more sought to return the matter to the Central Investigation Bureau, prompting the claimants to invoke their rights under the BITs.
IAReporter understands that the claimants are alleging breaches of several of the relevant BITs’ provisions, including those on expropriation, fair and equitable treatment, full protection and security, and unrestricted transfer of investments.
The value of the claim is currently estimated at approximately 50 million USD.
Mongolia’s BITs with Malaysia and the UK provide for 3- and 6-month waiting periods, respectively.
According to a report in the Financial Times, Mr. Buyantogtokh has dismissed the allegations against him as being “spurious” and is seeking asylum in the US.
The claimants are represented in the matter by Signature Litigation in London. It remains unknown whether Mongolia has yet retained counsel.
We will continue to monitor this dispute.
By Vladislav Djanic
Case(s) discussed in this article: