Arbitration tribunal rules in favour of the Government of Greenland in billion-dollar claim

Background

Since 2008, Greenland Minerals has had a licence to explore for rare earth metals at Kuannersuit in southern Greenland, where there is a very high content of the radioactive element uranium, and where the exploration has taken place under special conditions.

In 2021, Naalakkersuisut passed a Uranium Act, which introduced a ban on the exploration and exploitation of mineral resources in areas with a background level of uranium above 100 ppm. As a result, the mining company's application for an exploitation licence at Kuannersuit was rejected. However, in March 2022, before the rejection, the company instituted arbitration proceedings against the governments of Greenland and Denmark. Their claim was to obtain the requested licence or, in the alternative, damages of, presumably, USD 7.5 billion and interest of USD 4 billion until institution of arbitration proceedings. 

Greenland Minerals has subsequently filed lawsuits before the Court of Greenland (referred to the Greenland High Court) and the Copenhagen City Court. In addition, they have sued the Danish State, represented by the Ministry of Climate, Energy and Utilities, despite the fact that the field of raw materials is under the authority of the Government of Greenland and Denmark has no competence to grant the company an exploitation licence. 

Decision in line with expectations

In the arbitration, Greenland Minerals wanted the tribunal to decide 1) whether they are entitled to an exploitation licence; 2) whether the uranium legislation should nevertheless not apply to them; 3) whether there is a breach of contract; and 4) whether they are entitled to damages. In this connection, they also wanted the Danish State to be a party to the case in the same way as Naalakkersuisut. 

The arbitration tribunal has refused to enter into the discussions of any of the issues at this time. The matter has been completely rejected as far as the Danish State is concerned. In relation to Greenland, the arbitration tribunal has clearly rejected to be able to consider in any way whatsoever whether Greenland Minerals has any right to an exploitation licence or the application of the uranium legislation. This is all in line with the views of the authorities from day one. 

As for the alleged breach of contract and the claim for damages, the tribunal has wished not to decide at this time whether it can consider such an issue at all. The tribunal has reserved the possibility to potentially assess the issue of whether the tribunal can consider the matter at all, if the courts should later decide in Greenland Minerals' favour. Otherwise, the arbitration must be considered at an end.  

The position of the governments of Greenland and Denmark was all along that the arbitration tribunal has no jurisdiction to review the administrative decisions of the Government of Greenland to refuse an exploitation licence for the Kuannersuit project. Such decisions are only for the courts to review. It is therefore highly satisfactory that the arbitration tribunal has now ruled in favour of our clients.

Specialised team

The case has been highly complex, attracted international attention and has also been characterised by the fact that Greenland Minerals has been backed by a foreign investor and been represented by both a Magic Circle firm and a Danish law firm. We have conducted the case with a small, very specialised team with broad experience in, among other things, litigation and dispute resolution. The team has conducted the case and assisted the clients in all aspects of the case. 

The decision is an important milestone in the case, which now proceeds before the Greenland High Court and the Copenhagen City Court, where Greenland Minerals has filed lawsuits with essentially the same claims as in the arbitration case. Here, we will continue to safeguard the interests of the Government of Greenland and the Danish State - now in the forum where the case belongs. However, the Copenhagen City Court has just decided to dismiss the case against the Greenland authorities on the grounds that the Government of Greenland cannot be sued in Copenhagen.