Business
Commencement of Arbitration Proceedings
Commencement of Arbitration Proceedings.
About this update from Tomco Energy Plc
[{"type":"text","content":"\n \nTomCo Energy plc\n\n (\"TomCo\" or \"the Company\") \n\n Commencement of Arbitration Proceedings \n\nFurther to the announcement of 16 April 2009, TomCo announces that arbitration\nproceedings have been commenced by the Company and its wholly owned subsidiary\nLuton-Kennedy Ltd against Avenue Group Inc (\"Avenue\") and Avenue's wholly owned\nsubsidiary Avenue Energy Israel, Ltd. The claim for arbitration arises under\nthe Farm-out Agreement (\"Farm-out Agreement\") and the Joint Operating Agreement\n(\"JOA\") made between TomCo and Avenue as of 1 April 2008 under which TomCo\nacquired a 50% participating interest in the Heletz-Kokhav and a 25%\nparticipating interest in the Iris oil exploration and development licences\n(Licences) in the State of Israel.\n\nAvenue purported to terminate the Farm-out Agreement by way of a notice\nreceived by the Company on 10 April 2009, on the alleged grounds that TomCo had\nfailed to make a payment required under the terms of the JOA. Avenue claimed\nthat TomCo was in breach of its obligations and that Avenue was accordingly\nentitled to forfeit TomCo's participating interest in the Licences.\n\nTomCo's arbitration case rejects this assertion on the following basis:-\n\n A. Tomco has paid Avenue over $2.9 million pursuant to its contractual\n obligations.\n \n B. Avenue has failed to complete the Farm-out transaction in accordance with\n the terms of the Farm-out Agreement.\n \n C. Avenue has failed to account to TomCo for the significant expenditures\n which TomCo has funded under the terms of the JOA.\n \n D. Avenue has failed to account to TomCo for the substantial revenues it has\n received from Licence operations.\n \n E. Avenue has consistently failed to supply information to TomCo which it is\n obliged to provide under the terms of the Farm-out Agreement and the JOA.\n \n F. In consequence of its serious and repeated breaches of contract, Avenue is\n not entitled to demand continued performance by TomCo of its financial\n obligations until it has performed its own contractual obligations.\n \nTomCo is seeking a declaration from the arbitrators that Avenue is in material\nbreach of its obligations under the Farm-out Agreement and the JOA and must\nremedy those breaches forthwith and that Avenue's purported termination of the\nFarmout Agreement is invalid and of no effect. TomCo is ma...