Omni Bridgeway’s most recent podcast features commentary by Junior Surivar of McCarthy Tetrault, and Jon Drummer of Paul Hastings. The episode is part two in a series detailing litigation relating to mining disputes. Geoff Moysa hosts.
Below are some highlights from the podcast:
JS: There’s been a noteworthy spike in disputes addressing the finer points of royalties, where before, most disputes related to shareholders and joint ventures.
GM: Why?
JS: New partners can impact how royalties are seen by everyone. The precise interpretation of royalty agreements can be subject to multiple readings. Any time partners shuffle, there’s a chance that royalty agreements will be reread and reinterpreted.
Royalty agreements are generally entered early in a partnership. As situations change over time, the intention of the original agreement may be lost or changed dramatically. When a new party enters the arrangement, everything changes.
JD: Agreed. Intent versus the written document can lead to multiple interpretations.
GM: How likely is it that these disputes can be solved with negotiation?
JS: When there are differences of opinion or interpretation advanced in good faith, negotiation can go a long way.
JD: Yes, and expedited negotiations fast-tracked for results are common.
GM: What about multiple royalties or layers of objections? Have there been increases in disputes from specialized mining royalties?
JD: Not really. But there are many reasons partners might revisit royalty agreements for reinterpretation. There is a rise in mining royalty companies, which leads to all involved parties looking at the value of their royalties more seriously.
GM: Are disputes arising from M&As?
JD: That’s been a trend, yes. There’s been a rise in cases on environmental issues, as well as health and safety concerns, and others on securities disclosure laws. We expect that to continue.
JS: In Canada, we are seeing that on the environmental issues, but in Ontario, changes to the Class Proceedings Act make it more challenging to certify a class. This leads to funders or plaintiffs being less willing to invest in a class action.
