ALTHOUGH yesterday's decision relates to an action which began in 1989, the Bula affair has been the subject of several court actions stretching back over many years. One of the legal advisers to one of the parties involved in one of the actions must have been a prophet when he said: "I couldn't give an estimate as to when all this will be over to within a decade".
That was in 1988. Even then the Bula affair had already been the subject of court action. The proceedings, which ended yesterday, were marked by intense legal argument as well as accusations of bribery and corruption made by director Mr Michael Wymes against Tara Mines.
Bula had been dogged by legal and financial problems since it was set up in 1972. Bula Ltd is 49 per cent owned by the State. Its directors were suing Tara, the State and Outukumpu, the Finnish company which owns Tara, for economic loss, breach of contract and negligence and breach of constitutional duty.
The key players behind the legal action were Bula founder and director Mr Wymes, and Bula director Mr Richard Wood, a Co Cork farmer and businessman.
The company was claiming compensation of around £330 million.
Mr Wymes and his associates began legal actions in 1986, claiming that the Minister for Energy had breached an agreement made in 1975 to exploit the Navan orebody in the most expeditious manner possible. They also claimed that the Minister failed to force Tara to comply with its obligations under its lease.
Bula was set up to develop the Navan orebody. It was 51 per cent owned by Bula Holdings. Bula Ltd was established after Bula Holdings, in a controversial deal, paid Navan farmer Mr Patrick Wright £800,000 and gave him a 20 per cent stake in the company to acquire the 120 acres where the ore was located.
After the orebody was acquired, the directors of Bula Holdings set up Bula Ltd to develop the mine. Ownership of the orebody is vested in Bula Ltd. The State was given a 25 per cent stake free in Bula Ltd in 1975 and a further 24 per cent of the development company in three tranches, at a total cost of £9.5 million.
However, in 1979 when Bula applied for permission to mine the Navan site, the application was rejected after Tara, which had bid to acquire the Wright land, objected. Tara operates a lead/zinc mine beside the orebody Bula proposed to mine.
Bula finally got planning permission four years later and tried to raise finance to develop the mine.
However, the following year, after negotiations between the partners on an equity injection failed, and when separate negotiations to sell the orebody to Tara broke down, three banks owed a total of £15.5 million by Bula appointed a receiver.
The saga has come close to a settlement on several occasions. In January 1994, it was reported that an offer worth around £40 million was made to Bula by Tara. However, the State is believed to have objected to it, because its share of the settlement would only have been around £1 million.
Then almost one year ago this month, further settlement proposals from Tara were turned down by Mr Wymes and others. At this stage, the case had already been at hearing for 176 days over three years.
Yesterday's decision does not mark the end of Bula litigation activities. New legal proceedings are due to begin shortly.
These proceedings are being taken by Bula Ltd (in receivership), Bula Holdings, Mr Wood and Mr Wymes.
The defendants are the receiver, Mr Laurence Crowley, Northern Bank Finance Corporation Ltd, Ulster Investment Bank Ltd, Allied Irish Investment Bank Ltd and
Mackey and Schnellmann Ltd, an engineering company.
