A fight over a joint venture agreement in the Democratic Republic of Congo (DRC) has found its way to B.C. Supreme Court.
El Nino Ventures Inc. (TSX-V:ELN) has served a notice of dispute and a court petition against Congolese businessman Georges Kavvadias seeking $850,000 for breach of agreement.
The petition landed in B.C. after a DRC tribunal found that the dispute should be heard in Canada because El Nino is based in Vancouver.
The legal wrangle surrounds a December 2008 agreement between El Nino and DRC-based Phoenix Mining Corp. SPRL where El Nino agreed to buy a 70% stake in a prospective copper-cobalt belt. At the time of the agreement, Kavvadias was the principal shareholder of Phoenix.
According to acting El Nino CFO John Oness, the company cancelled the agreement last fall believing Kavvadias had "purloined" funds provided for the project.
The company also alleges that Kavvadias denied the company access to financial information regarding the joint venture, as well as its premises, equipment and property in the DRC.
In March, Phoenix initiated a claim against the company for $250,000 and damages saying that it had breached the agreement when it ended the DRC joint venture.
Now, El Nino wants $850,000 from Kavvadias to set off the March claim, and is also seeking damages for fraud and fraudulent misrepresentation.
Oness said Kavvadias used to be the company’s main man in the DRC.
“It’s a very difficult place to do business, and one of the things you need to have is someone who can champion your causes, and know how to move about in the government circles there,” Oness told BIV Thursday morning. “He represented himself as being that person.”
He added that the company wants to continue to work in the DRC, but any drill programs will have to slow until the legal actions are settled.