Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS.
Except as set forth below, we are not currently a party to any material legal proceedings.
On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against us in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v. Sustainable Opportunities Acquisition Corp. n/k/a TMC The Metals Company Inc., Index No. 650449/2023 (N.Y. Sup. Ct.). We filed a motion to dismiss on March 31, 2023, after which the plaintiffs filed an amended complaint on June 5, 2023. The amended complaint alleges that we breached the representations and warranties in the plaintiffs’ private placement Subscription Agreements and breached the covenant of good faith and fair dealing. The Plaintiffs are seeking to recover compensable damages caused by the alleged wrongdoings. We deny any allegations of wrongdoing and filed a motion to dismiss the amended complaint on July 28, 2023. On December 7, 2023, the Court granted our motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied our motion to dismiss the breach of the Subscription Agreement claim. We filed a notice of appeal regarding the Court’s denial of our motion to dismiss the breach of the Subscription Agreement claim. The appeal was heard on November 8, 2024. The NY Appellate Division upheld the lower court’s ruling in December 2024, moving the case into the discovery phase. Discovery closed following the plaintiffs’ filing of a note of issue on April 27, 2026. On June 26, 2026, TMC and the plaintiffs cross-moved for summary judgment, and that briefing is ongoing, with the parties’ opposition briefs due July 31, 2026 and reply briefs due August 25, 2026. There is no assurance that we will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated.
On January 16, 2026, American Metal Inc. and American Metal Resources LLC filed a civil claim in the Supreme Court of British Columbia, Vancouver Registry, captioned American Metal Inc. and American Metal Resources LLC v. TMC The Metals Company Inc. and The Metals Company USA LLC, No. S260335. The notice of civil claim alleged various causes of action, including tortious intimidation, breach of contract, breach of confidence and breach of the duty of honest performance, arising from discussions between the parties regarding potential collaboration and the submission of applications for deep seabed mineral exploration licenses to the United States NOAA. The plaintiffs sought damages and other relief, including a declaration and constructive trust in respect of any exploration licenses awarded to TMC USA. On March 3, 2026, we filed a response to civil claim denying the material allegations in the notice of civil claim, together with a counterclaim against Robert Heydon, American Metal Inc. and American Metal Resources LLC alleging, among other things, breach of contract, breach of confidence, breach of fiduciary duty, inducement of breach of contract and related claims arising from the alleged misuse of the Company’s confidential information in connection with competing license applications. In June 2026, without any admission of liability by any party, we entered into a settlement deed with American Metal Inc., American Metal Resources LLC, Robert Heydon and certain of his affiliated parties resolving this action, pursuant to which the parties agreed to the consent dismissal, without costs to any party, of the civil claim and our counterclaim, together with mutual releases of related claims. This matter is now concluded.
On May 18, 2026, NORI and TOML each issued a Notice of Dispute to the ISA concerning the ISA’s inquiries into their possible non-compliance with their exploration contracts. By Applications filed on June 5, 2026, each instituted proceedings against the ISA, together with a request for provisional measures, before the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea, captioned Nauru Ocean Resources Inc. v. International Seabed Authority, Case No. 34, and Tonga Offshore Mining Ltd. v. International Seabed Authority, Case No. 35. On July 18, 2026, the Chamber prescribed provisional measures in both proceedings; the merits remain to be briefed and heard. The relief sought is declaratory and injunctive rather than monetary, and no damages have been claimed or awarded. For a description of these proceedings and of related developments concerning NORI’s and TOML’s exploration contracts, see Note 17 to our unaudited condensed consolidated interim financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which description is incorporated into this Item 1 by reference.
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