Goldgroup Wins in Colorado Court

There has been so much excitement around Oroco that I haven’t been writing much about Goldgroup. Well, because there was nothing to write about. But let’s not forget that the only reason why I learned about Oroco was Goldgroup which did a deal with Oroco for Cerro Prieto and also shared that same office space.

Last week, Magistrate Judge Overruled As Court OKs Goldgroup Award

https://www.law360.com/articles/1158124

As follows a  layman’s summary of the sentence handed down by Judge Moore of the Circuit Court of Colorado. 

The civil case consisted basically of a request or recommendation by Dyna Resources to vacate ( i.e.rescind, annul ) the decision of an arbitrator in Denver which ruled totally in favor of Goldgroup in the dispute regarding unlawful dilution of GG’s 50% ownership of the shares of Dyna Resources Mexico. This request was filed as a response to Goldgroup’s original request for the judge to do the opposite: confirm and enforce the ruling of the arbitrator. 

As part of the case, Judge Moore also addressed the issue of a Mexican judge’s ruling that the arbitration should not have proceeded, either in Mexico or in Denver, and was not subject to US jurisdiction, and also against the previous ruling in 2015 of federal judge Marcia Krieger that the arbitration option was operative. 

In sum:

1. The judge provided a lengthy chronology of events leading up to, and including the legal dispute, and displayed very detailed knowledge and facts regarding the background of the case. 

2. The judge ruled almost totally in favor of GoldGroup, confirming in its entirety the decision of the arbitrator in Denver. 

3. Judge Moore rejected practically all of the arguments provided by Dyna Resources objecting to this confirmation which they  based on many legal technicalities found in the Panama Convention, rules of the AAA, US Federal Law, misgivings about Judge Krieger’s sentence, the validity of the Mexican court’s ruling, US Common Law, and so on. 

4. Specifically the judge ruled that the arbitration could not be annulled by a Mexican court, because the procedure was a matter for US jurisdiction,  and said that even if Mexican law were applicable, it would have to be applied in a US court. He stated that US courts were very capable of handling such matters. He noted that the Mexican court in no instance denied that arbitration was valid. 

5. He upheld the previous ruling of Judge Krieger stating that the option for arbitration was operative: i.e. it could proceed. 

6. The judge cited much US precedent of similar cases in his summary judgement. 

7. He also ruled that the arbitrator was legally justified in demanding that Dyna Resources should fully indemnify all legal costs and expenses of GoldGroup in relation to the case. That is, there were no grounds to deny indemnization of certain parts of the expenses. 

8. Basically the judge in his conclusion denied or rejected practically all of Dyna Resource’s arguments to vacate the arbitration, and therefore confirmed the arbitration ruling and ordered it to be enforced and the case closed. 

Conclusion

At this point, I am not really sure what the next legal step towards complete victory but this step is huge in the right direction.

Disclosure: Long GGA

About Mariusz Skonieczny 333 Articles
Mariusz Skonieczny is the founder of Classic Value Investors.