SouthGobi Resources Ltd. disputed a lawsuit filed by a fuel supplier over alleged outstanding fuel supply payments in the Khan-Uul District Civil Court of First Instance in Mongolia.

Magnai Trade LLC is claiming 22.2 billion Mongolian tugrik, equivalent to about US$8.9 million, comprising 14.6 billion tugrik in outstanding fuel supply payments and 7.6 billion tugrik as a late payment penalty and associated interest costs.

SouthGobi has filed an application to dismiss the litigation. It seeks to, instead, resolve the matter through arbitration in Mongolia in accordance with the fuel supply agreement between Magnai and its SouthGobi Sands LLC unit.

The company made a partial payment to Magnai in December 2016 and has been in talks to resolve the outstanding balance.

As of Jan. 19, US$1 was equivalent to 2,490 Mongolian tugrik.