Paul Willis signed away his stake in a jumbo gold project to Intrepid Mines in the lounge of a Jakarta hotel on April 21, 2008. He said he had no choice; he was surrounded by armed bodyguards in black suits at the time.
A Jakarta court found on Monday that Willis had relinquished his stake in the gold project under duress. The three judges awarded the Australian entrepreneur $13.7 million in damages.
Intrepid had previously dismissed the Willis claim as ”baseless”. It says it will appeal the court’s decision.
This once $1.4 billion company now finds itself in utterly desperate straits. Along with former joint venture partner Willis, it once boasted control of the Tujuh Bukit project in Java – one of the top 10 undeveloped copper and gold deposits in the world. Now it faces a humiliating liability to Willis, and has no gold project.
Intrepid conceded last December it had been kicked off the Tujuh Bukit site by its Indonesian joint venturers Maya Ambarsari and Reza Nazaruddin. Maya and Reza transferred the asset to another party. It is now mired in a legal stoush against the couple.
The supreme irony of Monday’s decision is that the couple were originally Paul Willis’s partners on the ground in Indonesia. Willis had introduced Intrepid to help fund the project. Intrepid and the Indonesian duo soon got together to kick out Willis in 2008; four years later, the duo turned around and kicked out Intrepid.
Intrepid had vigorously rebuffed the Willis claim from the start, saying there had been no intimidation at the Maharaja Hotel in South Jakarta when Willis signed away his rights in April 2008.
In any case, they said, Willis was a black belt in karate and could take care of himself. Willis said a black belt was not much chop when you were in a room full of armed bodyguards.
According to a transcript of the decision, the defendants committed an unlawful act by placing the plaintiff under duress, causing him to sign documents and pass control of his stake in the project.
Further, the agreement which Intrepid had entered with Maya and Reza after ejecting Willis was ”entered by an unlawful act and is therefore contravening to the Indonesian public orderliness”, the judges found in their verdict.
That the new agreement struck between Intrepid and the local partners has been deemed to be invalid by the Jakarta court may be just as damaging for Intrepid as the intimidation findings.
Not only is Intrepid fighting a legal stoush against Maya and Reza in Indonesia but it has also brought a claim in Singapore arbitration courts.
The claims of intimidation were not tested by cross-examination during the case. Willis had previously said that, at the time of signing, he was outnumbered nine-to-one. Those numbers included Intrepid’s then chief executive Brad Gordon, legal counsel Vanessa Chidrawi, and Indonesian partner Reza Nazaruddin. Willis says the bodyguards were armed with revolvers in holsters.
He says Gordon was there for the second half of the meeting and Chidrawi came in at the end of the meeting for the signing.
Earlier this year a spokesman for Gordon denied Willis’s claims, and Gordon was emphatic that there was one bodyguard and not six. He said there were ”three or four police”.
”The only other people apart from Reza’s offsider at a nearby table were the police who arrived at the end of the meeting to escort Paul Willis to the office to clear out his things.”
The panel of three judges in the South Jakarta court awarded Willis $3.7 million in specified damages which took account of the amount he invested in the project.
Willis had invested $4.75 million until he was kicked out and $2 million had been returned in the forced settlement. The $2.75 million difference is adjusted for costs incurred and time.
Besides the award for specific damages, $10 million was awarded to the plaintiff in non-specific damages, which took account of the increase in the value of the project in the past five years.
All the defendants, that is, both Maya Ambarsari and Reza Nazaruddin and Intrepid, are liable to pay the costs.
Intrepid has $90 million in cash and cash equivalents. Its market value is now $150 million.