Crystallex International (KRY) out of luck; may NOT seek arbitration recourse

VHeadline Reporters: Contract lawyers have told Toronto-based gold miner Crystallex International (KRY) that their luck is out and they don't have a leg to stand on if they seek to pursue a case for International Arbitration against the Venezuelan Guayana Corporation (CVG) over the cancellation of a Mine Operating Contract advised to the Canadian company a week ago.

While the original MOC signed in 2004 specifically stated that the initial exclusivity period was for 20 years extendible for one or two periods of ten years with the previous agreement of both parties Clause 19 of the contract (dealing with settlement of conflicts) specifically states that "any doubts and controversies of any nature whatsoever that may arise out of the performance of this contract and which may not be amicably settled by the parties shall be decided by the competent courts of the Bolivarian Republic of Venezuela, in accordance with its laws, and in no case and for no reason may they give rise to claims before foreign courts."

Essentially this means that Crystallex has previously agreed with the CVG not to go to arbitration and that it may not resort to international courts. It is considered unlikely that the company could even launch a preliminary hearing for summary judgment and/or that potential arbitrators might even consider such a suit in the first place.