Court File and Parties
COURT FILE NO.: CV-21-00662660-00CL DATE: 2022/02/15 ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST
BETWEEN: Centerra Gold Inc. Applicant – and – Tengiz Bolturuk Respondent
Counsel: Alexander D. Rose and Eliot N. Kolers for the Applicant David D. Conklin and Michael Wilson for the Respondent
HEARD: February 1, 2022
C. Gilmore, J.
Judgment on Application and Ruling on Cross-Motion
Introduction
[1] At the commencement of this hearing, counsel for the Applicant suggested that this was most egregious example of a breach of fiduciary duty he had seen in his career. Judges are often sceptical of such sweeping statements by counsel. In this case, however, the Court’s scepticism was misplaced. Counsel for the Applicant was entirely correct and did not overstate the significance of the Respondent’s conduct.
[2] The Applicant, Centerra Gold Inc. (“Centerra”), applies for a final Order enjoining the Respondent, Tengiz Bolturuk (“Bolturuk” or “Mr. Bolturuk”) from breaching his fiduciary duties and his duty of confidentiality as a former director of Centerra. Specifically, Centerra seeks a permanent injunction against Bolturuk to enjoin him from doing the following:
a. disclosing confidential information acquired in his capacity as a director of Centerra to Kyrgyzaltyn JSC ("Kyrgyzaltyn") or the Kyrgyz Republic (the "Republic") or any of their affiliates, representatives or agents; and
b. participating in any capacity, directly or indirectly, in the management or operations of Centerra's wholly owned subsidiary, Kumtor Gold Corporation CJSC ("KGC"), and of its principal asset, the Kumtor gold mine located in the Republic, following the unilateral removal of KGC's management by the Republic and so long as Centerra has any interest in the subject mine;
[3] Bolturuk brings a cross-motion setting aside the interim injunction Order of Justice Conway dated May 26, 2021 (“the May Order”). In the alternative, he seeks an Order varying paragraphs 2 and 3 of the May Order.
[4] Paragraphs 2 and 3 of the May Order are set out below:
THIS COURT ORDERS THAT the Respondent refrain from having any further involvement, directly or indirectly, with the management, operation or control of the Kumtor gold mine that is described in Centerra's Technical Report, effective July 1, 2020, and referenced in the Rehman Affidavit (the "Kumtor Mine"), pending further order of this Court.
THIS COURT ORDERS THAT the Respondent refrain from disclosing or using any confidential information of Centerra, including any non-public information relating to the Kumtor Mine obtained by him while he was a director of Centerra, pending further order of this Court.
[5] Both the Application and the cross-motion were heard on February 1, 2022. It was generally conceded that if Centerra was successful, the Respondent’s cross-motion would become moot. For the reasons set out below, this Court grants Centerra’s Application and dismisses Bolturuk’s cross-motion.
Background Facts and Previous Proceedings
[6] Centerra is a publicly traded gold mining company incorporated under the Canada Business Corporations Act, R.S.C., 1985, c. C-44 (“CBCA”). While Centerra still owns the subject mine (“Kumtor Mine” or “the Mine”), as of May 2021 it no longer operated the Kumtor Mine.
[7] The Kumtor Mine is located in the Republic and is Centerra’s main asset. Centerra has spent billions of dollars over the past two decades developing the mine and implementing modern mining techniques along with safety and environmental protections. The resources in the mine are finite and are expected to be depleted by 2031.
[8] The Republic, through its wholly owned corporation, Kyrgyzaltyn, owns 26.2% of the issued shares of Centerra. Given its ownership interest, Kyrgyzaltyn has the right to designate two persons to be nominated for election as directors of Centerra based on a 2009 Shareholders Agreement (“the Shareholders Agreement” or “the 2009 Agreement”).
[9] The Kumtor Mine is one of the largest gold mines operated in Central Asia by a Western-based company. It produced more than 13.2 million ounces of gold between 1997 and the end of 2020. The Kumtor Mine represented almost 10% of the Republic’s GDP in 2020 and employs approximately 4,000 Kyrgyz citizens. The Mine’s gold production represents more than half of Centerra’s production worldwide. Kyrgyzaltyn has a gold refining monopoly in the Republic and buys all of the gold from the Mine, refines it and exports it for sale.
[10] Until May 2021, Centerra operated the Kumtor Mine indirectly through Kumtor Gold Company CJSC (“KGC”). KGC is a subsidiary company organized under the laws of the Republic. Centerra and KGC have had a relationship with the Republic since the 1990s when the Mine began operations. Since then, Centerra has contributed more than $4.4 billion to the Republic’s economy via a series of investment agreements.
[11] There is no dispute that, over the years, the relationship between Centerra and the Republic has been a difficult one. The Republic has alleged, for example, that Centerra has created environmental harm and that there is unfairness in the economic relationship between them. In order to manage the relationship, there have been various settlement agreements and renegotiations. The most recent agreement from 2017 provided Centerra and KGC with full releases and resolution of all existing arbitral and environmental claims and proceedings (the “2017 Agreement”).
[12] On October 28, 2020, Centerra appointed Mr. Bolturuk to its Board of Directors (“the Board”) as a representative of Kyrgyzaltyn. Mr. Bolturuk is a Kyrgyz-Canadian citizen and an Ontario Professional Engineer who was living in Oakville at the time. At the time of his appointment, Mr. Bolturuk disclosed he was working for a mining consulting company and advising the Republic’s President, Sadyr Japarov, to develop strategies to attract international investors to hydropower and mining projects. Centerra was not concerned about this disclosure. They viewed Mr. Bolturuk as a way to facilitate communication between Kyrgyzaltyn and the Board.
[13] Once appointed, Mr. Bolturuk was offered participation in a director orientation session on December 3, 2020 but he refused. He was personally advised by the Vice-President and General Counsel of Centerra, Mr. Yousef Rehman (“Rehman”), that despite the fact that Bolturuk had been nominated to the Board by Kyrgyzaltyn, he owed the same fiduciary duties and duties of confidentiality as other directors. A copy of the slide presentation that would have been provided to Bolturuk had he attended the orientation session was sent to him by email as well as an invitation to consult with legal advisors about his duties.
[14] The PowerPoint presentation sent to Mr. Bolturuk contained the usual provisos with respect to a Board member’s duty to act in the best interest of Centerra, that corporate opportunities belonged to Centerra, that directors were not to disseminate confidential information to third parties or use such information to further their own interests, and that directors were bound to disclose information which could affect Centerra’s business or operations.
[15] Mr. Bolturuk signed a compliance and disclosure statement in which he agreed to comply with Centerra’s Directors’ Code of Ethics. The relevant passages are reproduced below:
As directors owe a duty of loyalty to Centerra, their personal interest and their duty to Centerra should not be put into conflict. Therefore: a) directors will promptly report all actual, potential or perceived conflicts of interest to the Corporate Secretary. If in doubt such conflict should be reported. The Corporate Secretary shall bring such conflict to the attention of the Nominating and Corporate Governance Committee. No director shall participate in directors' discussions, deliberations or decision making affecting such conflicts relating to himself or herself as the case may be; and b) directors will not sit on boards of corporations competing with Centerra nor be members of organizations or groups adverse in interest to Centerra without the permission of the board.
As directors must act in the best interests of Centerra, they owe their duty to the corporation as a whole and not to any particular constituency thereof.
[16] As a director, Bolturuk received confidential material in relation to upcoming Board meetings. That material included some of the following information:
a. Assessments of 2021 exploration plans, budgets for capital projects and opportunities such as the re-processing of tailings dam materials.
b. Assessment of long-term gold pricing.
c. Exploration discovery costs and management’s assessment of strategic, corporate and operational risks.
[17] Centerra concedes that much of the initially confidential information was ultimately publicly disclosed except for some information related to management’s assessment of strategic and operational risks.
[18] On February 5, 2021, Bolturuk wrote to the Prime Minister of the Republic and offered to resolve the situation with Centerra in favour of Kyrgyzaltyn and the Republic based on information he had obtained as a Board member and from his tour of the Mine. He advised the Prime Minister that he could resolve all of the problems with the Mine in favour of the Republic and gain control of KGC within six to eight months.
[19] At the request of the President, Bolturuk moved to the Republic on February 17, 2021. He has lived there ever since.
[20] On February 24, 2021, the Republic established a State Commission to review the effectiveness of the Kumtor Mine activities (“the State Commission”). At a meeting with Centerra’s CEO on February 25, 2021, Kyrgyzaltyn proposed an increase in its representation on the Board. Bolturuk attended the meeting. He advised that the Republic was investigating the constitutionality of the 2009 Agreement and other claims against Centerra.
[21] On March 5, 2021, Bolturuk, through his holding company Global Revival, entered into a consulting contract with Kyrgyzaltyn. Bolturuk would be paid $30,000 USD per month plus expenses. In exchange, he was to develop a plan for resolving all conflicts between Centerra, KGC, Kyrgyzaltyn and the Republic, select employees and contractors to assist him with the plan, and propose amendments to the Republic’s law on Mineral Resources (which governs the operation of the Mine).
[22] On March 10, 2021, Bolturuk wrote to the Chairman of Kyrgyzaltyn and recommended that Kyrgyzaltyn enter into a consulting contract with First Canadian, a Toronto-based consulting company, in order to pursue a final solution in relation to the Mine.
[23] In March 2021, four citizens of the Republic filed a lawsuit against Centerra alleging it had illegally dumped tailings on glaciers in 2019. Representatives of Centerra were concerned as this allegation had been dealt with and released in the 2017 Agreement. Centerra objected to the lawsuit on the grounds that the 2017 Agreement precluded the Republic or any person from bringing any further action in relation to the released claims.
[24] Notwithstanding the 2017 Agreement and the releases contained in it, the Court ordered Centerra to pay $3,087,000 USD, payable to the Republic. KGC planned to appeal the judgment but other events intervened culminating in the takeover of the Mine by the Republic. On April 26, 2021, Centerra and KGC gave the Republic notice of dispute under the terms of the 2009 Agreement.
[25] On April 30, 2021, the President of the Republic introduced legislation in the Kyrgyz Parliament (the “Parliament” or the “Kenesh”) to assume management authority over KGC by way of a Temporary Management Law (“the TML”). The TML was passed on May 6, 2021 after three readings in a single day and came into effect on May 14, 2021. The TML applied only to the Centerra mine. It provided for the appointment of a Temporary External Manager who would have full control over all of KGC’s assets and bank accounts. Centerra shareholders or its Board would have no right to interfere with the External Manager. Individuals who violated the TML could face criminal punishment.
[26] In response to the TML, Centerra issued a press release on May 7, 2021 stating that the TML violated the 2009 project agreements and the Republic’s own laws which confirmed the agreements. The market price of Centerra’s shares dropped 30% after the May 7, 2021 press release was published. A further press release was issued by Centerra on May 11, 2021 in which it stated that the actions of the Republic were intended to coerce Centerra to give up ownership of the Mine or falsely justify a nationalization of the Mine.
[27] On May 14, 2021 Centerra and KGC commenced international arbitration against the Republic and sought relief in accordance with the 2009 and 2017 Agreements.
[28] On May 15, 2021, senior managers of KGC were visited by persons claiming to be law enforcement officials. Those persons seized the managers’ computers and passwords. Some managers were taken to the Mine site where Kyrgyz authorities installed their own officials without warning to Centerra or KGC.
[29] By May 17, 2021, it was clear that the Republic has seized operational control of KGC and the Mine. On that same day, Bolturuk resigned from the Board. On May 17, 2021, Centerra issued a press release confirming that agencies of the KGC has seized control of the Mine but that safety and operational systems at the Mine were operating without incident.
[30] On May 18, 2021, the Republic appointed Bolturuk as External Manager of the mine under the TML.
[31] On May 20, 2021, Centerra served Bolturuk with the within Application seeking an interim, interlocutory and permanent injunction enjoining him from breaching his fiduciary duties and duty of confidentiality to Centerra. The Application was returnable on May 26, 2021.
[32] The Application was sent to Bolturuk at an email address that had been used by him earlier that day. The issuance of the Application was reported in a Centerra press release and in turn by various news outlets. The Application was also served on Bolturuk at his Oakville address. Bolturuk consulted with counsel at Goodmans LLP (“Goodmans”) who contacted Centerra’s counsel on May 25, 2021.
[33] On May 21, 2021, the Republic issued a press release in English indicating that the Mine had resumed full operations and that a Republic-appointed management team had resumed production of gold at the Mine site. On that same day, Bolturuk sent a letter to Centerra advising that KGC had been placed under external administration in accordance with the TML with Bolturuk appointed as the provisional external administrator.
[34] On May 25, 2021, counsel to Centerra was contacted by Goodmans. Goodmans advised it was not on the record for Bolturuk and sought an adjournment so Bolturuk could obtain counsel. Counsel for Centerra advised it would be proceeding on May 26, 2021.
[35] Justice Conway did not grant a permanent injunction on May 26, 2021. She granted an interim injunction on certain terms which continue to this day. The matter was returnable on June 4, 2021. Bolturuk’s counsel attended on June 4, 2021. The matter was subsequently adjourned to November 2021 and then to the hearing date of February 1, 2022. The interim injunction was continued on consent. Bolturuk’s cross-motion to set aside the injunction was served in October 2021 and it was later agreed that the matters would be heard together.
[36] A copy of the interim injunction order was served on Bolturuk by email and to his Oakville residence on May 26, 2021.
[37] On May 31, 2021, KGC and its affiliate filed under Chapter 11 of the federal U.S. Bankruptcy Code in New York. Centerra is not affected by the filing.
The Position of the Applicant
[38] The Applicant submits that Mr. Bolturuk was not appointed to the Board because of his international mining experience. He was appointed in the hope that he would facilitate better relations between the Republic and the Board. However, Bolturuk later acknowledged while giving a presentation in Parliament that he had been placed on the Board to serve the national interest of the Republic.
[39] While on the Board, Mr. Bolturuk received information that was not readily available to the public and received a tour of the mine on December 17, 2020. In the course of that tour, he asked technical questions about drilling, costs and new projects. This information would not have been available to the public.
[40] Rehman, the Vice-President and General Counsel of Centerra, provided two affidavits in this matter. In his reply affidavit affirmed on July 23, 2021, Rehman provided examples of how Bolturuk’s conduct was inconsistent with statements in his affidavit that his focus was on advancing Centerra’s best interests while on the Board. Some examples are set out below:
a. In a news article dated June 21, 2021, Bolturuk publicly stated that his focus was to defend Kyrgyzaltyn and that he never agreed to protect Centerra’s interests.
b. In the Kenesh, Bolturuk publicly stated on May 21, 2021, “… I represent Kyrgyzaltyn, your largest shareholder, and by protecting in the first place the interests of Kyrgyzaltyn, I protect Centerra of course. Accordingly, not the other way around…so my first duty is to protect the interests of Kyrgyzaltyn.”
c. While Bolturuk claims in his affidavit that he requested and was not provided with a letter explaining his obligations as a director and any potential for conflict, Rehman does not recall such a request. Bolturuk was provided with the PowerPoint presentation which explained his duties as a director.
d. Bolturuk claims he was not told that information he received from Centerra was confidential or that it could not be shared with the Kyrgy President or Kyrgyzaltyn. This is contrary to Directors’ Code of Ethics which Bolturuk signed and which specifically states:
- The directors recognize that corporate information given to them as directors is confidential and they will maintain such information in the strictest confidence.
[41] Rehman also deposed that while Centerra understood that directors appointed by Kyrgyzaltyn would approach issues from a different perspective than other directors, Bolturuk was expected to honour his fiduciary duties. The hope was that the appointed directors from Kyrgyzaltyn would facilitate communication with the Republic, but this did not relieve them of their duties as directors.
[42] Centerra and KGC were unaware of the contract entered into by Bolturuk on March 5, 2021. Bolturuk has refused to provide any of the work product he prepared under that contract. Equally, Centerra and KGC were unaware of Bolturuk’s recommendation that Kyrgyzaltyn enter into a contract with First Canadian to facilitate a strategic plan aimed at gaining control over the mine. First Canadian was to receive a success fee of up to $100M. Bolturuk denies having seen the First Canadian contract but was clearly aware of it given his recommendation of First Canadian. Bolturuk refused to provide any communication between him and First Canadian prior to his resignation from the Board.
[43] Bolturuk also did not disclose to Centerra that while sitting on the Board, he attended meetings of the State Commission, attended presentations made to the Commission including a presentation by First Canadian, and made a presentation to a closed session of the State Commission related to Centerra’s alleged ineffective management.
[44] After the TML was passed on May 6, 2021, an article in a domestic newspaper published on May 8, 2021 contained statements from Bolturuk publicly supporting the TML (he was one of its proponents), accusing Centerra of breaking Kyrgyz law, engaging in ongoing environmental violations, and endangering the lives of mine workers. Bolturuk was quoted as saying that the TML could be used to pressure Centerra into making concessions to the Republic in relation to the Mine. Centerra denies all of the allegations made by Bolturuk and views them as fabricated solely to justify the drastic and swift actions taken by the Republic and Bolturuk to take over the mining operations.
[45] On May 12, 2021, while still a Board member, Bolturuk surreptitiously distributed two WhatsApp audio recordings through his phone. The messages include the following statements:
God willing we’ll have Centerra on their knees. For now, I cannot reveal details. All this is confidential so that Centerra can’t prepare, that’s why I can’t tell you all the secret… God willing we will accomplish at the end of May, trust us, in our favour… we will take Kumtor back, and God willing, it will happen.
[46] Bolturuk attempts to defend his comments by stating that Centerra should have seen this coming given that it was intended that he would cooperate with Kyrgyz authorities. The Applicant submits it had no idea of the extent of Bolturuk’s actions between February and May 2021 and his clear involvement in the orchestration of the Mine takeover.
[47] After the raid on senior managers by officials from the Republic on May 15, 2021, Centerra was very concerned about the seizure of computers and unauthorized persons in its offices and on its Mine site. Contrary to the Republic’s allegations, Centerra did not suspend KGC’s operations, rather, Centerra disabled access to its global information systems to protect its information. Access to those systems was not required to operate the Mine safely.
[48] Bolturuk takes the position that it was necessary for an External Manager for KGC to be appointed because Centerra switched off their computer systems which had the effect of disabling the glacier and pit wall monitoring systems (the “Early Warning Systems”).
[49] Bolturuk claims that his appointment as External Manager was temporary and only intended to ensure that the systems were properly running in order to ensure the health and safety of the Mine employees. Despite this apparently temporary appointment, Bolturuk continues to run the Mine. The affidavit of Mr. Paul Young, the Director of Digital Mines states unequivocally that the Early Warning Systems were never switched off.
[50] Rehman’s reply affidavit confirms that he was not contacted by Bolturuk or anyone else on May 17, 2021 about concerns with respect to the Early Warning Systems. A May 17, 2021 Press Release from Centerra confirms that those systems were operational and that access to those systems is not needed to safely operate the Mine.
[51] Bolturuk’s affidavit does not explain his involvement with the scheme to acquire control of the Mine, Centerra or KGC. As noted in the Rehman affidavit, affirmed on May 24, 2021, the WhatsApp recordings make it clear that Bolturuk had been working for months with the objective of taking over the Mine. Bolturuk now claims that his phone “broke” on June 3, 2021 and he cannot access or confirm the WhatsApp recordings. He refuses to produce the broken phone. Centerra’s position is that it is clear that Bolturuk’s involvement with the takeover of the Mine began long before his resignation from the Board on May 17, 2021.
[52] News of Bolturuk’s resignation from the Board and appointment as External Manager was in the local press by the evening of May 17, 2021. Bolturuk advocated for an end to the “humiliating cooperation with Centerra.”
[53] On the day of his resignation from the Board, Bolturuk attended the Kenesh and showed a propaganda film related to the Mine. He advised the Members of Parliament that he had worked on the film some weeks earlier with members of the State Commission. Based on transcripts obtained from that session of Parliament, Bolturuk made the following statements:
(a) He had been appointed to the Centerra Board in order "to get to know the activities of this company better" but it was a "great honour for [him] to serve the national interests of Kyrgyzstan" in doing so.
(b) He confirmed that, while he was a director of Centerra, he had been working to advance the interests of Kyrgyzaltyn and the Republic over those of Centerra.
(c) When asked by one of the MPs whether he felt like a "traitor" for divulging Centerra's potentially confidential information so soon after serving on its Board, he replied that he did not.
(d) He disclosed that he had been privy to advice from top U.S. and Canadian law firms with respect to potential claims against Centerra. The Chair of the State Commission, A. Japarov, advised the Kenesh that Mr. Bolturuk was the one who had found the law firms;
(e) He stated that he had been working with a PR company in America and Canada to publish articles, including in the Financial Times and Toronto Star, that could impact the reputation of Centerra;
(f) He stated that "we will get what belongs to us ... we are not talking about Kumtor here, we are talking about Centerra. Take a share in Centerra itself to manage this company, not only Kumtor, but there are two deposits ... in Turkey and Canada. We claim everything, because all of this was bought with money from profit obtained from Kumtor"; and
(g) He stated that "we need to run Centerra Gold" and, to that end, lawyers had been instructed to negotiate with other major shareholders to garner their support and bring about a change to the Board and management of Centerra. Bolturuk stated that his goal was to convince the rest of the shareholders that company management had been entrusted to the wrong people.
[54] In that same session of Parliament, the Chair of the State Commission discussed Bolturuk’s appointment as External Manager of the Mine and stated that he had discussed the appointment with Bolturuk in advance in order to earn “quick money” from the seized gold in order to fund the international arbitration.
[55] During that session of Parliament, the President of the Republic stated as follows:
Our thinking is that from here on, Kumtor should belong to us and we will operate it ourselves .... But I can't yet disclose how we will do that. We are focused on not losing the arbitration .... We can't interfere with the 2009 Agreement, however, Article 24 of the enterprise law mentions harm to human health and ecological damage, and that is how we can interfere now. We will enter through that loophole and obtain all the information they are withholding, prepare for arbitration and continue to work from there on. That is our intention.
[56] Once Bolturuk was appointed External Manager, he posted notices throughout the KGC office with an Order that there would be no further interaction with Centerra. Days later, KGC disconnected its systems from the Centerra network which severed its connection with the Republic.
[57] On May 27, 2021, Bolturuk uploaded a video to his personal Facebook page in which he is seen leading meetings and discussing Kumtor Mine operations. On May 31, 2021, Bolturuk updated his Facebook page and posted that “…we almost completely eliminated the negative consequences associated with blocking the digital resources of Kumtor Gold Company, which was made by Centerra Gold. We fulfill all our responsibilities to employees in a timely and full manner.”
[58] On June 2, 2021, an article in the domestic press quoted the leader of the Socialist Party as saying the following:
We have an international court waiting for us. If we prove in the international court that the Kumtor agreement is corrupt from the very beginning, that the president and the government are forcing their subordinates to do so, the world community will react negatively to corruption. We need to look at revenge as PR, but as a way to strengthen our evidence base.
[59] On June 21, 2021, Bolturuk commented publicly on these proceedings and stated that he never agreed to protect the interests of Centerra “in the first place” and was simply defending Kyrgyzaltyn and the Republic.
[60] As a result of Bolturuk’s acts against Centerra, it has been excluded from access to or the operations of the Mine. Centerra was forced to write off a loss of $926M USD in the second quarter of 2021 due to the takeover of the Mine. Bolturuk continues to manage the extraction of gold from the Mine while receiving his salary of $30,000 USD per month plus expenses.
[61] Management of KGC led by Bolturuk reported that as of June 25, 2021, the Republic had sold approximately 40,000 ounces of gold and made profits of US $40M. It is projected that revenue of $660M would be achieved in 2021. Centerra has not received any of this revenue.
[62] Bolturuk has announced that the Mine will be transformed from open-pit to underground. Centerra consciously chose not to pursue this type of mining given that it would affect the long-term viability and safety of the Mine. Centerra is very concerned that changes implemented by Bolturuk will harm Centerra’s strategy and cause irreparable harm to the Mine, its employees, suppliers and the environment.
[63] The Applicant submits that in hindsight, it is clear that the Republic and Kyrgyzaltyn nominated Bolturuk to the Board with an undisclosed agenda in order to allow him to familiarize himself with the Mine’s operations and to obtain confidential information about Centerra’s strategies for exploration and development. Bolturuk is now a key figure in coordinating the government’s efforts to steal the mine from Centerra. Bolturuk’s actions were intended to harm Centerra and it is essential that he is restrained from breaching the duties he owes to Centerra in order to minimize past and ongoing harm to the Mine and to Centerra.
The Position of the Respondent
[64] The Respondent submits that Centerra was well aware that its Mine was a matter of considerable public interest in the Republic. In fact, when Mr. Japarov was elected as President in January 2021, he was clear that he supported resource nationalism and formed the State Commission in order to investigate the effectiveness of the Kumtor Mine.
[65] Bolturuk was appointed to the Board because of his mining experience and not as part of any scheme to expropriate the mine. Once appointed, he only attended three Board meetings before his resignation in May 2021. During his time as a director, he acted in an entirely responsible manner by raising issues such as environmental damage to active glaciers, employee safety, procurement practices and operating costs. Bolturuk deposed that he never received a meaningful response to the concerns he raised nor were they reported in the Board minutes despite telling the Board that President Japarov was upset with the manner in which Centerra was managing the Mine and dealing with environmental damage.
[66] Bolturuk visited the Mine in December 2020. He was not scouting confidential information. Rather, he asked questions based on his experience in the industry and raised a concern about equipment by the tailings dam which indicated that Centerra was processing the tailings. This was illegal under Kyrgyz law as the tailings belonged to the Republic.
[67] Further, Centerra was aware that Bolturuk was, prior to and during his time as a director, an advisor on mining to the Kyrgyz President, that he operated Global Revival as a mining consultancy, and that he was viewed by Centerra management as both a representative of the Kyrgyz government and a bridge to facilitate communication with both Kyrgyzaltyn and the Republic.
[68] Naturally as a representative of Centerra’s largest shareholder, Kyrgyzaltyn, it is not surprising that Bolturuk would be interested in and raise issues related to Centerra’s management. At no time did Bolturuk hide his relationship with the Republic or Kyrgyzaltyn or his relationships with those entities prior to assuming a position on the Board. He was not acting as a “mole” as alleged; he clearly expressed his views at Board meetings that Centerra needed to change its mining operations. He also did not hesitate to state his position on the perceived unfairness of the investment agreements between Centerra and the Republic.
[69] Bolturuk’s concerns were related to Centerra’s compliance with local laws, procurement practices and problems with its operations. These concerns were genuine and based on Bolturuk’s 30 years of experience as a mining engineer.
[70] Bolturuk did not misuse confidential information as alleged. All of the material information concerning the Mine had been disclosed by February 24, 2021 as admitted by Rehman in his cross-examination. In any event, any commercially sensitive information related to the Mine was already in the possession of Kyrgyzaltyn and the State Commission. There is no evidence that Bolturuk was or is using any of this information to manage the Mine.
[71] Rehman deposed that although much of the information received by Bolturuk while on the Board ultimately became public, certain information remained confidential, namely the information on the potential for tailings reprocessing and future expansion plans for the Kumtor Mine. On cross-examination Rehman admitted that the tailings and expansion information referred to above was all made public by February 24, 2021. Further, Centerra did not disclose that it had provided extensive commercially sensitive information directly to Kyrgyz authority through early 2021. As such, Bolturuk’s position is that any of the information he received during the short time he was on the Board was either not confidential or publicly known.
[72] In the arbitration filed by Centerra against the Republic and Kyrgyzaltyn, Centerra has made allegations against Bolturuk as follows:
On December 4, 2020, Kyrgyzaltyn nominated Tengiz Bolturuk as one of its two representatives to the Centerra Board. Upon joining Centerra' s Board, Mr. Bolturuk confirmed that he understood, as a director, that he owed a duty of loyalty to Centerra, and that he would act in the best interests of Centerra at all times. Between December 2020 and May 2021, as a Centerra director, Mr. Bolturuk was provided and had access to confidential and commercially sensitive information about the Kumtor Mine and Centerra. He also had unfettered access to the Kumtor Mine.
At the same time, upon information and belief, Mr. Bolturuk was secretly working with Respondents and their U.S. and Canadian legal counsel to hatch a plan to expropriate the Kumtor Mine ...
Claimants seek a preliminary and final injunction barring Respondents and their agents from taking further steps to expropriate the Kumtor Mine, and will seek damages that resulted from Respondents' breaches of the Agreements.
[73] Bolturuk submits that the relief sought in this Application is duplicated in the arbitration claims made by Centerra. Centerra’s real complaints are against the Republic and should be dealt with in the context of the arbitration. The focus on Bolturuk is misplaced and of no effect.
[74] After control of the mine was gained on May 14, 2021, Centerra remotely disabled the Early Warning Systems at the Mine. Bolturuk was very concerned about this action on the part of Centerra as the Early Warning Systems are vital to the safety of those working at the Mine. Shutting down those systems put lives in danger. He deposed that he resigned as a Board member because of Centerra’s ill-advised decision to shut down the Early Warning Systems. He then had discussions with the President about Centerra’s decision and the fact that such a decision had created significant and unjustifiable risks. The President asked for Bolturuk’s help in restoring the Early Warning Systems. The Cabinet used its powers under the TML to appoint him as External Manager in the circumstances.
[75] Bolturuk disputes Rehman’s and Young’s position that the disabling of the Early Warning Systems is not required to operate the Mine safely. Neither Rehman nor Young were in the Republic in May 2021 and were not in a position to know what was happening at the relevant times.
[76] After control of the Mine was gained on May 14, 2021, Centerra also disabled its accounting system which meant that employees could not be paid nor supplies obtained. Bolturuk wrote two letters to Centerra requesting that they reinstate those systems. Centerra did not respond.
[77] Bolturuk’s responsibilities since his appointment as External Manager have focused on restoring the Early Warning Systems, pay systems and reviewing certain environmental issues related to the Mine. According to Bolturuk, it took two IT companies working multiple shifts for several weeks to restore the Early Warning Systems. Since Bolturuk began as External Manager at the mine, he has retained the same employees and managers who were there before the TML.
[78] After the May Order was made, Bolturuk attempted to resign as External Manager of KGC on June 8, 2021. He was told by the Chairman of the Kyrgyz Cabinet that he had to continue to fulfil his obligations as External Manager or he would face criminal and civil liability. A copy of the letter outlining the Cabinet’s position was provided with Bolturuk’s material. Bolturuk is of the view that as a Kyrgyz citizen living in the Republic, he must comply with the directions of the government. He is doing all that he can to protect the interests of those who work in or are dependent upon the Mine.
[79] Bolturuk did not play a role in the decision of Parliament to pass the TML as he is not a member of Parliament nor does he have the power to influence laws that are passed in the Republic. Bolturuk concedes, however, that he expressed support for the TML after it was passed because he believed it to be a mechanism to protect the Republic’s interest in the Mine if its own managers failed to do so.
[80] Bolturuk is not responsible for the decline in the relationship between Centerra and the Republic which led to the Republic taking over the Mine. The assumption of the Mine by the Republic was based on the Republic’s long-standing legal authority to intervene in the economic and administrative activities of Kyrgyzaltyn. Bolturuk was not involved in the Republic’s decisions in this regard.
[81] As for the WhatsApp recording on his phone, Bolturuk deposed that since his phone broke on June 3, 2021, he has been unable to retrieve its contents to confirm the accuracy of the transcript provided by Rehman.
[82] In terms of using the expressions that Centerra would be “brought to its knees,” Bolturuk explained that this is a translation of a Kyrgyz expression which means that someone should get off their high horse and respect a higher power, in this case the laws of the Republic. It was intended to mean that Centerra must comply with the Republic’s laws and be held accountable for its decisions. The prior government of the Republic had lost control of the situation at the Mine and Kyrgyz laws were being ignored. The current government has rightly decided to ensure that Centerra and its mining operations adhere to the laws of the Republic.
[83] Bolturuk does not agree that he was in a conflict of interest with Centerra. He considered the interests of Centerra and Kyrgyzaltyn to be aligned. Given what he understood to be the potential for conflicts given his representation of Kyrgyzaltyn, he asked Mr. Rehman for a letter explaining his views on this so he could get legal advice. He did not receive the letter nor was the issue of conflict raised until he received the within Application.
[84] Bolturuk remains in place managing the Kumtor Mine. With his two post graduate degrees and his experience in the mining industry, he believes he is the right person for the job by ensuring best practices are in place for safety and environmental protection. He is also fluent in the local language and familiar with Kyrgyz culture. This is important given that the Mine’s 4000 workers are almost all Kyrgyz citizens. It is likely the Mine will be returned to Centerra once the State Commission and the Republic can trust Centerra and are satisfied that it will respect local laws and stop harmful environmental practices.
[85] With respect to the set aside motion, Bolturuk submits that he was not served with the Application Record or Factum until after the hearing. He received a copy of the Notice of Application on May 21, 2021 by email. He was not present at the initial return of the Application and advised that he required a short adjournment to retain counsel. He had attempted to retain counsel in time for the hearing, but the 10-hour time difference made it difficult. The Court was aware that Bolturuk had contacted Goodmans and intended to retain them. Nevertheless, the Court proceeded to hear the Application. The Order made by the Court in his absence was extremely broad and made without the benefit of Bolturuk’s important evidence.
[86] Bolturuk’s position is that the May Order should be set aside as s.247 of the CBCA has no application to former directors. Further, the evidence provided by Centerra at the hearing was incomplete, misleading and is disputed.
Analysis and the Law
Issue #1 – Should the Injunction be Permanent?
Jurisdiction
[87] Bolturuk argues that there is no statutory basis for relief sought under s.247 of the CBCA as he is no longer a director. Section 247 sets out as follows:
Restraining or compliance order
247 If a corporation or any director, officer, employee, agent or mandatary, auditor, trustee, receiver, receiver-manager, sequestrator or liquidator of a corporation does not comply with this Act, the regulations, articles or by-laws, or a unanimous shareholder agreement, a complainant or a creditor of the corporation may, in addition to any other right they have, apply to a court for an order directing any such person to comply with, or restraining any such person from acting in breach of, any provisions of this Act, the regulations, articles or by-laws, or a unanimous shareholder agreement, and on such application the court may so order and make any further order it thinks fit.
[88] While Centerra submits that there is jurisdiction under s.247, its alternative argument is that this Court has inherent equitable jurisdiction to issue an injunction against Bolturuk. Bolturuk does not dispute this Court’s equitable jurisdiction but denies there has been a breach of confidentiality or fiduciary duty.
[89] I agree with Centerra that it is a proper complainant under s.247 as a corporation seeking to remedy acts of a director for the benefit of its shareholders. A corporation was acknowledged to be a proper “person” in Arend v. Boehm, 2017 ONSC 3582, at para. 53.
[90] Bolturuk argues that he is no longer a director and therefore out of the reach of this Court’s remedial power. I do not agree. In Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592, at p.607, the court held as follows:
[a]n examination of the case law in this Court and in the Courts of other like jurisdictions on the fiduciary duties of directors and senior officers shows the pervasiveness of a strict ethic in this area of law. In my opinion, this ethic disqualifies a director or senior officer from usurping for himself or diverting to another person or company with whom or with which he is associating a maturing business opportunity which his company is actively pursuing, he is precluded from so acting even after his resignation where the resignation may be fairly said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, or where it was his position with company rather than a fresh initiative that led him to the opportunity which he later acquired. [Emphasis added.}
[91] In that case, two employees learned of a corporate opportunity in a different country. They resigned from the company and took the opportunity for themselves. Clearly, fiduciary duties “travel” with those bound by them even after ties with the company where they obtained those opportunities have been severed.
[92] As set out below, Bolturuk has breached his fiduciary duties to Centerra. By extension to the principles in Aero, this Court has the jurisdiction to enjoin further breaches no matter where Bolturuk may be residing or working.
[93] Permanent injunctions restraining conduct worldwide are not new to this Court: see Barrick Gold Corp. v. Lopehandia, 71 O.R. (3d) 416 (C.A.), where this Court imposed such an injunction on a Defendant who did not reside in Ontario. In this case, Bolturuk still has a residence in Oakville and remains a Canadian citizen as well as a citizen of the Republic. Centerra’s head office is in Toronto. Bolturuk owes fiduciary duties to Centerra under Canadian law which can be enforced by this Court’s in personam jurisdiction.
Did the Respondent Breach his Fiduciary Duties?
[94] Having found that Bolturuk is bound by such duties even after his resignation, the question remains as to whether he breached those duties.
[95] First, however, there is the question of whether Bolturuk fully understood his duties. Bolturuk did not dispute that he was offered a slide presentation of his duties to Centerra on December 3, 2020. He refused the presentation. He was then sent a copy of the slide presentation by email. Bolturuk did not dispute that he received the slide presentation.
[96] Bolturuk signed the Directors’ Code of Ethics which set out his duty of loyalty including reporting conflicts of interest and not sitting on Boards or organizations that were adverse in interest to Centerra. Bolturuk complains that he requested clarification on some of his duties by letter, but did not receive a response. This is a red herring. Bolturuk received a full slide presentation and signed the Code of Ethics. I find that he was fully aware of his fiduciary obligations to the Board.
[97] Centerra made it clear that they were not relying solely on Bolturuk’s duty of loyalty to retain confidential information learned as a Board member. This was because it was clear from the evidence that much of the information learned by Bolturuk either became public at some point or was available to the State Commission and/or Kyrgyzaltyn.
[98] However, I agree with Centerra that it is not necessary for this breach to have occurred to find that other breaches did occur. I also agree with Centerra that notwithstanding Bolturuk’s rather creative attempts to have this Court interpret his actions as being in the interests of Centerra and the Republic in order to address various alleged wrongs perpetrated by Centerra, he has fallen short in that regard.
[99] The Court has gone through an extensive recitation of the facts and evidence in this case as a thorough understanding of the background and chronology of events is necessary to understand why a permanent injunction is necessary in this case.
[100] While it is true that Centerra viewed Bolturuk as a Board appointment who would facilitate their communication and relations with Kyrgyzaltyn and the Republic, it was not aware of the extent of his actions between December 2020 and May 2021, which I find were intended to harm Centerra. Further, it was not surprising that Bolturuk would present different views of Centerra’s management and compliance given his alignment with Kyrgyzaltyn. However, I accept that Centerra was completely unaware of the manner and extent to which Bolturuk was working contrary to its interests.
[101] Examples of this conduct are numerous and set out above but a few of the more egregious ones are set out below:
a. Bolturuk made public statements that his focus was to defend Kyrgyzaltyn and not Centerra. He also made a propaganda film tailored to North American audiences which negatively portrayed Centerra.
b. His recommendation to Kyrgyzaltyn that it enter into a consulting contract with First Canadian to facilitate a plan to gain control of the Mine and then refusing to produce any copies of his communication with First Canadian; He also failed to disclose to the Board that he was attending presentations to the State Commission by First Canadian while a Board member.
c. Bolturuk publicly supported the TML as a way to force Centerra to make concessions to the Republic;
d. Bolturuk entered into a consulting contract with Kyrgyzaltyn while a Board member for which he was paid $30,000 USD per month. Bolturuk did not disclose this contract to the Board.
e. The WhatsApp recording in which he states that “we” will have Centerra on its knees and that the details were to be kept confidential to ensure Centerra could not prepare. Bolturuk’s attempts to explain away this recording were unsuccessful. He did not deny that he made it, just that without his phone he could not verify the transcript;
f. Bolturuk’s attempts to explain the urgency of his appointment as External Manager because of Centerra’s shut down of its Early Warning Systems does not make sense. The Early Warning Systems have long since been reactivated but Bolturuk remains in charge of the Mine. In any event, the clear evidence of Mr. Young entirely contradicts Bolturuk’s protestations concerning the alleged seriousness of Centerra’s actions. I infer that the entire history of the Early Warning Systems shutdown complaint was yet another misplaced attempt to justify the Republic’s and Bolturuk’s actions in taking over the Mine’s operations.
g. The timing of Bolturuk’s resignation from the Board and his appointment as External Manager the next day and within days of the TML coming into effect is remarkably coincidental. Bolturuk used his role as a director to pave the way for his appointment as External Manager of the Mine. He did not need to use confidential information to do this.
h. The various statements which Bolturuk made to the Kenesh on May 17, 2021 (set out at paragraph 53 herein) really do not need much explanation. His statements align with the President’s view expressed in the Kenesh on the same day that “Kumtor belongs to us and we should operate it ourselves.”
i. While loudly protesting that part of the reason why the mining operation had to be taken over by Kyrgyzaltyn and the Republic was because of Centerra’s disregard for environmental and operational issues, Bolturuk has announced that gold will now be mined underground. The evidence from Centerra was that this would irreparably harm the Mine.
j. Bolturuk continues to run the Mine and earn a salary of $30,000 USD per month plus expenses. Meanwhile, the Republic is making huge profits from a mine in which Centerra invested billions. Bolturuk implies that the Mine “might” be returned to Centerra if the Republic regains trust in Centerra. There is no time frame as to when that might happen. Based on the evidence before this Court, Bolturuk intends to manage the Mine indefinitely.
[102] Bolturuk’s conduct put him in a position of conflict with Centerra by failing to disclose his communication with the State Commission, the President and the Cabinet related to a well planned take over of the Mine’s operations. Even his nomination to the Board was, as he told the Kenesh, to gain information about Centerra.
[103] Bolturuk denies that there has been usurpation of a corporate opportunity because Centerra still owns shares in KGC. However, that shareholding interest has become meaningless because Centerra no longer has any control over KGC or its profits.
[104] Bolturuk also denies usurpation of a corporate opportunity because the TML would not permit anyone from Centerra to be appointed to the external management position. That position is rejected by this Court as Bolturuk publicly supported the TML and was in consultations with the President about it. Indeed, the TML was passed in one day and made effective eight days later on May 14, 2021. This lined up perfectly with Bolturuk’s resignation from the Board and his appointment as External Manager. Bolturuk has done exactly what Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592 precludes. He has taken a corporate opportunity for himself and is being well paid for it.
[105] As Bolturuk continues to manage the mining operation and all of Centerra’s confidential information was seized, it is logical to conclude that Bolturuk still has access to confidential information which he may continue to use.
Has Centerra Met the Test for an Injunction as per the Court of Appeal?
[106] In Labourer’s International Union of North America, Local 183 v. Castellano, 2020 ONCA 71, 444 D.L.R. (4th) 183, the Court of Appeal of Ontario, at para. 25 citing Nunatukavut Community Council Inc. v. Nalcor Energy, 2014 NLCA 46, 358 Nfld & PEIR 123, at para. 72, set out the framework for the exercise of discretion to grant a permanent injunction as follows:
(a) Has the claimant proven that all the elements of a cause of action have been established or threatened?
(b) Has the claimant established that the wrongs that have been proven are sufficiently likely to occur or recur in the future that it is appropriate for the Court to exercise the equitable jurisdiction of the Court to grant an injunction?
(c) Is there an adequate alternate remedy, other than an injunction that will provide reasonably sufficient protection against the threat of the continued occurrence of the wrong?
(d) If not, are there any applicable equitable discretionary considerations (such as clean hands, acquiescence or hardship) affecting the claimant's prima facie entitlement to an injunction that would justify nevertheless denying that remedy?
(e) If not, are there any terms that should be imposed on the claimant as a condition of being granted the injunction?
(f) Where an injunction has been determined to be justified, what should the scope of the terms of the injunction be so as to ensure that only actions or persons are enjoined that are necessary to provide an adequate remedy for the wrong that has been proven or threatened or to effect compliance with its intent?
[107] Bolturuk suggests that Centerra has failed to address this framework and in particular has failed to establish any ongoing breach of confidentiality or fiduciary duty. Further, any past breaches could be remedied by damages. Finally, an injunction would indefinitely prevent Bolturuk from working in the Mine and would cause undue hardship to him.
[108] I do not agree. I find that Centerra has met the test articulated by the Court of Appeal. First, the breach is ongoing because Bolturuk’s presence at the Mine is the usurpation of a corporate opportunity and one can infer that in such a role he would continue to have access to confidential information.
[109] Damages are an inadequate remedy and unable to be properly quantified as set out below. Finally, the hardship alleged by Bolturuk is an illusion. He is free to work anywhere else as a mining engineer. Also, as mentioned below, the submission that the injunction would put him in a position of breaking Kyrgyz law has been rejected by this Court on the grounds that it has not been proven.
Are Damages an Appropriate Remedy?
[110] Centerra does not seek to have Bolturuk disgorge his salary either historically or currently. Damages are not sought by Centerra as it is difficult to quantify the harm done to Centerra in this case. This principle is echoed in GasTOPS Ltd. v. Forsyth, 2009 ONSC 66153, [2009] O.J. No. 3969 (S.C.), where the Court held as follows, at paras. 1450 - 1451:
[1450] In cases such as this which involve a breach of confidence, the courts have considerable flexibility to fashion a remedy to suit the particular circumstances of the case. Injunctions to prevent the continued use of confidential information can be granted. Injunctive relief may be sought in addition to a claim for other reliefs such as damages or an accounting of profits and may be granted before or after trial. (See: Thorburn and Fairbairn at 7.2100 and Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574 at paras. 74, 81 and 186)
[1451] The primary consideration for the courts in determining whether to grant an injunction is whether damages or the repayment of profits alone would provide an adequate remedy. In most cases involving the misappropriation of confidential information, damages are not, on their own, an adequate remedy because of the difficulty in quantifying the harm suffered and the risk of future injury.
[111] I note that Justice Conway already found that Centerra would suffer irreparable harm if an injunction was not granted. That has not changed in this Court’s view. Bolturuk appears to have no plans to turn over the Mine to Centerra or give up his position as “temporary” External Manager, and Centerra has received no income from its flagship asset since May 2021.
[112] The Court does not intend to punish Bolturuk as alleged, rather, the Court is simply exercising its jurisdiction to have Bolturuk cease acting as External Manager.
Will Imposing an Injunction Create a Conflict with Kyrgyz Law?
[113] Bolturuk claims that imposing an injunction on him would put him in conflict with Kyrgyz law and subject him to criminal and civil liability given that he is bound to fulfill his duties as External Manager.
[114] Bolturuk has the onus of proving that Kyrgyz law is different from Ontario law with respect to the effect of the injunction in the Republic. In U.S.A. v. Mgbolu, 2015 ONSC 1273, the Court was clear that foreign law must be proved as a fact in our Courts: at para. 18. Bolturuk has not provided evidence of a specific law, a translation of same or an expert opinion about such a law. As such, the presumption is that Kyrgyz law is the same as Ontario. That is, ceasing to work as External Manager would not attract either criminal or civil liability for Bolturuk.
[115] Centerra also raises the point that the Republic may not have complied with its own laws in appointing Bolturuk as External Manager as the conditions of appointment in the TML have never been met. There is also the issue of the Decree passed by the Cabinet of Ministers on May 17, 2021 which permitted the External Manager to be relieved of his duties where he submits an application to be relieved or there are circumstances which prevent the performance of his duties. The injunction would surely be such a circumstance.
[116] Further, it is not clear that Bolturuk raised the terms of the Decree when he tried to resign and was rebuffed in June 2021. Mr. Bolturuk is free to work anywhere else he chooses. He has the skills and experience to do so. I therefore do not give any weight to his argument that he is unable to resign as an alleged contravention of Kyrgyz law.
Issue #2 – Should the Interim Injunction be Set Aside?
[117] Not much needs to be said on this issue since the Court intends to grant the Applicant’s relief. However, in briefly addressing the arguments raised in the cross-motion, it is clear that Bolturuk was validly served with the Application and that the test for an interim injunction was met.
[118] The additional evidence which Bolturuk has put before this Court has not been persuasive and this Court rejects Bolturuk’s position that the Court on the initial return date was somehow mislead. In fact, the contrary is true. Centerra put forward all of the evidence it had at that time. The evidence which has come out since then has simply bolstered their position and confirmed that the test for both an interim and permanent injunction has been met.
Issue #3 – Should These Matters Wait until Trial?
[119] The short answer to this is no. First, the issue of converting this Application to a trial was raised for the first time in Bolturuk’s factum for this hearing. At no time during the appearances before Justice Conway or the other contacts with the Court did Bolturuk indicate that the Application should be converted to an Action or that anything other than a written record was required.
Orders and Costs
[120] Given all of the above, I make the following Orders:
a. The relief sought in the Application is granted.
b. The Respondent’s cross-motion is dismissed.
[121] The parties have agreed on costs but not the scale of costs. The successful party on the Application is to receive either $225,000 in partial indemnity costs or $300,000 in substantial indemnity costs. The successful party on the motion is to receive $50,000 in partial indemnity costs and $75,000 on a substantial indemnity scale.
[122] Mr. Rose submits that substantial indemnity costs are warranted due to the flagrant breaches of fiduciary duty and the conduct of Bolturuk. For example, Bolturuk claimed that turning off the Early Warning Systems put employees’ lives in danger. This was simply not true based on Mr. Young’s evidence.
[123] Further, Bolturuk maintained that he was not involved in an orchestrated scheme to take over the Mine, but documents received from anonymous sources after the Application was issued makes it clear that he was. Finally, Bolturuk refused to produce his phone and other relevant documents. He has continued to defy the May Order of Justice Conway without any indication that he intends to leave his position at the Mine.
[124] Mr. Conklin suggests that any award of costs should be made on a partial indemnity scale. The conduct of Bolturuk has been adequately explained with respect to his well-known allegiances to the Republic and Kyrgyzaltyn.
[125] I agree with Mr. Rose that this case should attract a scale of costs that is higher than partial indemnity given Bolturuk’s conduct and the findings of this Court. Bolturuk does not actually deny the content of the inculpatory documents in the Applicant’s material. He, unsuccessfully, tries to explain their context. This Court has already found that Bolturuk’s constructed reasons for having to stay on as External Manager should be given no weight. His arguments with respect to both jurisdiction and his actual role in the takeover of the Mine were also rejected.
[126] Bolturuk must pay costs for both the Application and the failed motion in an amount which reflects this Court’s negative findings but is an amount proportional to a one-day hearing with multiple records and extensive cross-examinations.
[127] Therefore, Bolturuk shall pay the combined all-inclusive amount of $310,000. The costs are payable forthwith.
[128] I wish to thank counsel for their excellent material, diligence and civility in this case.
C. Gilmore, J.
Released: February 15, 2022
