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Abu Dhabi, UAESaturday 23 June 2018

Dubai court awards South African drilling firm $10m in damages over 'Ebola dispute'

The company’s drilling equipment was damaged due to disuse after it was ordered off a site in Guinea

A South African drilling contractor has been awarded $10 million by a Dubai court after judges accepted the company’s argument that it was unjustly ordered off a mining site with its equipment left to corrode.

The company filed a case against the Dubai-based mine operator before the Dubai Civil Court following a long-standing row.

The court heard that the South African firm was told it must leave the site in Guinea in 2012 due to a suspected Ebola virus outbreak, but this was two years before the actual epidemic.

The judges rejected this and accepted that the company, based in Secunda in north-east South Africa, suffered significant losses when it was forced to leave the site.

The court was told that the Dubai-based mine operator won mining rights in 2010 for diamond, gold and precious stone sites in Guinea.

It signed an exploration drilling contract with the South African company in November 2011.

The firm provided services ranging from making the site accessible, readying the area, providing water supply and drilling equipment.

“My client paid $400,000 to move four pieces of drilling equipment to the location, then moved its staff, including supervisors and maintenance technicians and started mining work,” said legal consultant Hassan Elhais whose firm Al Rowad Advocates represented the South African company,

He told the court that his client worked for about three months from March 2012 hired 16 local workers and installing 10km water pipes to reach the remote drilling site.

The Dubai operator ordered them to stop work in July 2012 blaming it on the Ebola virus and political unrest in the country.

“We were told that work will soon be resumed. I even left a bag of my personal belongings expecting to return," the site manager said.

A request from the company for the machinery to be lifted from the site was rejected by the Dubai firm, Mr ElHais said.

The South African company was offered a $1millon settlement that was rejected.

Other attempts to resolve the issue were also unsuccessful, he said.

A case was filed before the Dubai Civil Court and the court sent an auditor to the location.

The auditor travelled to the site in March this year and reported that the drilling equipment was ruined.

The court ruled that the Dubai operator was responsible for causing the claimant to lose millions of dollars and ordered it to pay $10.1 million in compensation.

In its defence, the Dubai company told the court that they had informed the drilling company, in writing, of a decision to terminate excavations and added that no promises were made that work will be resumed.

“We are unable to continue excavations, which started 11 months ago, and we do not plan to resume excavations in the near future,” the company said it told the contractor in an email. The court said it had not seen evidence that such an email was sent.

The Dubai firm immediately appealed the verdict.