Monday, December 12, 2011

Oman-USA FTA being tested.


Now, this is interesting. Do any of you remember the story earlier this year about US-based investor Adel al Tamimi? In a nut shell, this guy (who is based in Boston) had two of his companies (Emrock and SFOH) enter into 2 25 year lease agreements with state-owned Oman Mining Company back in 2006 to develop a quarry in the Jebel Wasa region (very close to the UAE border, between Buraimi and Hatta). Anyway, so the story goes: al Tamimi spent a lot of money on infrastructure at the site including access roads and accommodation as well as plant equipment purchases and hires in 2007. Come 2009 he was arrested and thrown in jail for 3 months for the theft of rocks & sand and violations of environmental regulations(!), and of course his mining operations were shut down. In June 2010, he was acquitted of all charges, but not before his mining operation was confiscated and sold off! The land was taken back by the government, the equipment was sold to competitors and workers were dispersed thus effectively destroying his ability to conduct his business.

Quite understandably, al Tamimi was a little bit hacked off that all his investments had been flogged by Oman Mining Company and so in April of this year he formally filed notice to request international arbitration (a very firm part of the Free Trade Agreement between Oman and the USA) to resolve his dispute with Oman Mining Company. Now the process seems to work with a 90 day notice, and then the case if not agreed is allowed to be referred to an international arbitrator who will make a final ruling. Emphasis on international. Anyway, Muscat Daily today reported that al Tamimi's lawyers formally filed last Friday a request for arbitration. The amount in dispute is considerable: US$ 560m

Now this is interesting because on the face of this story, it looks like Oman Mining Company failed to hold up it's end of the agreement and did not secure the appropriate permits and licenses to conduct the works. If the arbitrator rules in favour of al Tamimi, it'll be very interesting to see how Oman reacts - if they don't pay up, the investing world will surely notice. First the debacle with Blue Circus City, and now this, another half billion dollar snub by Omani companies.

I look forward to hearing the outcome of the arbitration, hopefully it'll be reported on locally - and good job to Muscat Daily for covering this today.

le fin.

5 comments:

Anonymous said...

Ohhhhhh. I can't wait to see the outcome!

Thats What I said...

Oman Mining is a Government body. Its august board of directors who presumably have no competing interest in other mining companies will doubtless show that they took great care to ensure that a substantial investor from the US / UAE was treated fairly and that no person profited by the acquisition of a 'fire sale' of land and equipment.
Its good that they are concerned about environmental regulations and presumably will be looking at the quarries littering the landscape around Fanja, Batina Coast, Nizwa, Samad al Shan and other places and the situation around the port in Sohar.

Anonymous said...

Whats this ?

People from the West being robbed by them Camel Jockeys these days ?

:p

Blue Collar Indian

Nuff said...

Sorry, but you used the words "environmental regulations" and "Oman" (can be replaced by any other Middle East country at will) in one senctence!? That's just too funny! ;-)

...and that's only what I said....

Thats What I said...

"Blue Collar Indian"
lol.....
Adel al Tamimi's geographical origin vis-a-vis Oman is north (his name might hint WASP to you but hes from the hot deserts of the UAE).
But I suppose it does make an interesting slant compared to this one.
http://www.muscatdaily.com/Archive/Oman/Muscat-scamsters-take-UAE-companies-for-a-ride
yours "No Collar Gora"