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A Perth-based miner has had a win in the most unlikely of legal systems: Saudi Arabia.

A Saudi judge has dismissed a case against Alara Resources (ASX:AUQ) brought by its former local joint venture partner over a “financial claim”.

The claim concerned Alara’s flagship project — a zinc and copper play in Saudi Arabia called “Khnaiguiyah”.

Alara’s stock surged on the news, gaining 20 per cent to an intraday high of 3.1c. It closed Wednesday at 2.8c.

United Arabian Mining Company (Manajem) brought the claim in 2014 before the Board of Grievances.

A Saudi judge has now dismissed all claims in the case in a verbal judgement, with a written judgement to follow, according to a report by the company’s legal counsel in Saudi Arabia.

In 2014 Manajem claimed alleged breaches by Alara under the joint venture agreement in failing to secure capital to develop the Khnaiguiyah project (see map below).

Alara has finished a feasibility study on its flagship Khnaiguiyah zinc and copper project in Saudi Arabia

It wanted the board to terminate Alara’s agreements and give it control of the project, as well as have Alara pay all costs associated with it of $183 million.

It also alleged that Alara had caused $US15 billion to Manajem from “direct damages to Saudi mining law and the national economy”.

Alara said at the time the claims were “unspecified and unsubstantiated”.

Before the claim was made, Manajem and Alara had reached an impasse over the new Heads of Agreement after the Australian company increased its stake in the project to 60 per cent.

Alara Resources shares (ASX:AUQ) over the past year.

Manajem had refused to transfer the Khnaiguiyah mining licence to the joint venture company.

On Wednesday, Alara hoped the judgement would clear the way for the mining licence to be reissued and the project to go ahead.

It has also received an offer to buy its Saudi operations.

“If the deal is completed, it is anticipated that Alara would maintain a role in the Khnaiguiyah project and a continuing interest in its future success,” the company said.

“While the court judgement was a welcome decision, it does not change Alara’s main focus on developing its copper projects in Oman, including construction of the Al Hadeetha Copper Project 1mpta1 processing plant at the Al Washihi – Mazzaza mining licence site.”