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BRISBANE, Australia (March 13, 1999 - Radio Australia)---A Brisbane (Australia) Supreme Court judge has reserved his decision on whether the Papua New Guinea government can appeal against a ruling that it pay more than $30 million dollars to the British mercenary group, Sandline.

In a statement released after the court was adjourned yesterday , Sandline said it would continue to seize PNG's overseas assets to recoup the millions it claims it is owed.

PNG has asked Sandline to suspend seizing assets until after the appeal application hearing, but Sandline says it is legally entitled to pursue PNG-owned property, shares and bank accounts.

Sandline claims it is owed about $40 million, following an aborted contract it signed with the former PNG government of Sir Julius Chan.


By Daniel Korimbao

PORT MORESBY, Papua New Guinea (March 12, 1999 - The National)---The British firm Sandline International indicated yesterday it was willing to meet PNG government officials to settle out of court the dispute over the aborted military contract.

Also yesterday, Prime Minister Bill Skate called on all multinational corporations to reject Sandline International approaches laying claim to PNG Government accounts held by them.

The Prime Minister's call follows the latest turn of events in which Sandline sought to obtain money due the PNG Government from Chevron Niugini.

An international arbitration tribunal last October awarded Sandline US$ 18 million (K 41 million), the second half of the US$ 36 million contract.

The first part was paid on January 31, 1997 upon signing of the agreement.

Sandline has, in the last fortnight, instituted proceedings to recoup the money from PNG assets and accounts in many countries around the world.

''We are quite willing to talk to Mr. Skate on neutral grounds to settle the matter,'' Sandline's commercial manager Michael Grunberg said from London last night.

Mr. Grunberg, however, said the PNG Government had rejected such moves proposed through Sandline lawyers on numerous occasions earlier.

''We have proposed this to the PNG Government on many occasions through our PNG-based lawyers, but it has on those occasions refused to take it up,'' he said.

It is understood that with the accrued interest and costs awarded against PNG, the total amount the State is liable to pay Sandline is now nearly US$ 28 million.

The international tribunal, comprised of three judges from Australia, England and New Zealand, found on October 29 last year that the contract with Sandline was legal and awarded the balance of the contract to Sandline plus eight percent per year interest and costs of legal proceedings.

The state has already paid 40,000 pounds sterling (K 153,000 at current rates) as deposit for costs during the tribunal hearing and was recently forced by a Australian court decision to pay an additional A$ 70,000 as security prior to the commencement of its appeal.

The appeal began yesterday in the Queensland Supreme Court in Brisbane.

PNG is seeking leave from the Queensland Supreme Court to appeal the tribunal's decision, claiming it is wrong and that the agreement was in fact illegal.

In its recent actions to recover the money, Sandline has targeted K 13.9 million in commodities support funds held in a Belgian bank.

Sandline has also requested the American oil firm Chevron, which operates the Kutubu and Gobe oil fields, to assume those debts to the PNG government by paying proceeds of the sale of those resources to their account.

''It is like buying tax losses. There is nothing unusual about it ... but Chevron has said they are not interested,'' said Mr. Grunberg.

Mr. Skate said in a statement last night that he has been alerted to attempts by Sandline to have companies operating in PNG to give the money to the mercenary company instead of paying PNG taxes.

"I have received correspondence from Chevron Niugini that Sandline has e-mailed them asking for Chevron's tax money," he said.

Mr. Skate said there appeared to be no end to the desperate measures Sandline was prepared to take.

"They have already put their hand out for European Union aid money intended to pay for aid posts, roads and immunization clinics. Now Sandline is trying to con PNG business people into giving their tax money to them. Who knows where they will stop; next they could be asking parents for their school fee money," he said.

Mr. Skate restated his position on the mercenary group.

"The contract with Sandline was illegal and the services they provide run against the moral spirit of this nation. We will stand up to this group of guns for hire and expose every move they make against the people and the development of Papua New Guinea," he said.

Mr. Skate said he appreciated Chevron Niugini alerting the Government about Sandline's request and added he had received similar reports from other companies.

"As a good corporate citizen in this nation, Chevron alerted the Government of the Sandline approach. I appeal to other companies who have received similar appeals to ignore this latest desperate attempt by Sandline," he said.

But Mr. Grunberg rejected Mr. Skate's comments as outrageous.

He said at the exhaustion of the case before the Queensland Supreme Court, they would pursue all legal avenues to get what they were entitled to.

Sandline also argued yesterday that the Queensland court did not have jurisdiction to hear the application for leave by the PNG Government to appeal the tribunal decision.

The PNG Government will present its case for leave to appeal today.

Next week, the Supreme Court here will hear submissions which question the constitutionality of the contract under the PNG Constitution.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

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