Has the Oyu Tolgoi’s Dubai deal been voided?

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The Administrative Cases Court decided to annul government resolutions related to Oyu Tolgoi’s 2015 expansion deal, commonly referred to as the Dubai agreement, after a session held on Monday.

The multibillion-dollar agreement between the Mongolian government and mining giants Rio Tinto and Turquoise Hill Resources was the trigger to jumpstart the underground extension of the project back in 2015 after a two-year delay. However, it has been under scrutiny for its legal grounds. Simply put, it is not legally binding, according to Darkhan Mongol Nogoon Negdel NGO, which has been strongly against the Dubai agreement and filed a lawsuit to have relevant resolutions voided in October last year.

Some researchers and politicians also claimed that Mongolia is suffering 20 billion USD losses since the agreement was signed.

In its claims, the NGO underlined that CEO of Erdenes Mongol LLC B.Byambasaikhan and CEO of Erdenes Oyu Tolgoi LLC D.Ganbold were permitted to sign the 2015 expansion agreement for Oyu Tolgoi on behalf of the Mongolian government or stakeholder, not then-Prime Minister Ch.Saikhanbileg. This was backed up by Prime Ministerial Resolutions No. 88 and No. 123 dated April 16, 2015 and May 15, 2015 respectively. 

However, the court ruling may not be the end of the year-long squabble as former Prime Minister Ch.Saikhanbileg, who signed the agreement with Rio Tinto, can appeal to the court within 14 days after the ruling. 

When asked to comment on the recent development of the Dubai agreement, Oyu Tolgoi LLC told news.mn, “Darkhan Mongol Nogoon didn’t sue Oyu Tolgoi LLC but the government. Dubai agreement hasn’t been annulled.”

On the other hand, legal specialist at Erdenes Mongol LLC S.Aslanbek says that the court decision doesn’t revoke the agreement but deems it illegal. 

“There’s no agreement under the name ‘Dubai’ but an underground development plan signed between the Mongolian government and foreign legal entities in Dubai. At the time, three parliamentary resolutions and four prime ministerial resolutions were established in relation to this agreement. Two of the four prime ministerial resolutions issued the right to establish this agreement and the other two assigned a taskforce and relevant guideline,” he wrote on his Facebook account.

“Believing that these four prime ministerial resolutions breached the Law on Government and Administrative Law, an NGO made a claim to the First Instance Court of Administrative Cases to have these resolutions ruled illegal. This started an administrative case, the hearing of which ended and the four resolutions ruled illegal. One thing to add, this case does not concern the agreement itself but administrative decisions.”

Overall, people are coming to the conclusion that the Dubai agreement has been technically revoked as the resolution allowing its establishment has been ruled illegal. However, the final decision will be made after the case goes through the Supreme Court and Arbitration Court as the agreement includes such articles.

Dulguun Bayarsaikhan