Should your mine choose litigation, mediation, or arbitration? The Economist of February 3, 2007 notes that JAMS, America’s main mediation and arbitration service, has more than 200 full-time “neutrals” on its books. It handles 10,000 cases a year worldwide. And this is just a small part of the rising use of mediation and arbitration in preference to full-scale court litigation. The reasons are simple: litigation is costly and slow, whereas mediation is fast and cheap (OK maybe only cost-effective.)

For what it is worth I can vouchsafe for JAMS. For four years I provided specialist geotechnical services to one of their administrative law judges in a huge mediation settlement. It was fun; but more important it was impressive, and, I suspect, saved both parties millions. There are many others. I know of none that specialize in mining related arbitration or mediation. Although there are specialists out there in your area. Ask your lawyers, they will know best.

There are not many case histories out there as by definition the proceedings are not published. Here are a few – but not some are of cases where the parties resorted to litigation because they did not like what the arbitrators said.

Delta Mine Holding Company resorted to litigation regarding the conduct of a non-impartial arbitrator.

Behre Dolbear: Australia - Work practices review and arbitration assistance for a major coal producer. Conducted a comprehensive review of work practices at the world’s “best” surface coal mines then compared and contrasted these practices against the client’s operations. Justified the mining company’s work force adjustments and work practice revisions. Australian labor arbitrators ruled in favor of the client in 12 of 14 issues.

Here is one worth following: A mining company previously at the center of controversy over the proximity of a project to an American Indian sacred site is now seeking $50 million under the North American Free Trade Agreement (NAFTA). Vancouver, British Columbia-based Glamis Gold Ltd. has filed an arbitration claim alleging that the company suffered huge financial losses after legislation and regulation was passed in California prohibiting the company from extracting gold from a site in the southern California desert. The move is the latest chapter in a nine-year-long dispute pitting Glamis against the Quechan tribe, whose members reside on the Fort Yuma Reservation in southeastern California. In the late 1990s the tribe objected to Glamis' proposed 880-foot-deep and mile-wide open pit cyanide leaching gold mining operation, claiming the mine would be too close to an area near Indian Pass that they held sacred. This is part of a network of points and braided trails known by the Quechan as the ''spirit trail'' which ultimately links two mountains in the southern California desert: Avikwaame, or Indian Pass, in the north and Avikwala, or Pilot's Knob, in the south. Though Glamis claimed the mine would actually sit a few miles away from the site, the tribe countered that it would still sit within the bounds of an area regarded by the tribe as sacred.

Two from the Mayer, Brown, Rowe site:

  • ICSID Arbitration. Represented a UK mining equipment manufacturer against African sovereign in bilateral investment treaty dispute relating to mining project in International Centre for Settlement of Investment Disputes. Joy Mining Machinery Limited v. Arab Republic of Egypt (Case No. ARB/03/11).
  • Kyrgyz Investor-State Arbitration. Represented Kyrghyzaltyn, the state-owned concern of Kyrgyzstan, in connection with an arbitration with U.S. gold mining company. The arbitration was conducted before the Arbitration Institute of the Stockholm Chamber of Commerce, and involved a dispute regarding a joint venture agreement between Kyrghyzaltyn and MK Gold for the exploration, development, mining, and processing of certain gold deposits located in the Republic of Kyrgyzstan. The arbitration settled favorably for our clients.