US judge rules for Grupo Mexico in Asarco dispute

NEW YORK/MEXICO CITY, Sept 2 (Reuters) - A U.S. judge has ruled that Mexican copper miner Grupo Mexico did not commit malicious fraud in a 2003 when it transferred a valuable stake in a Peruvian miner from its now-bankrupt U.S. unit, Asarco.

But in a complex ruling, the judge also said Asarco's directors had breached their fiduciary duty in the sale and harmed some of Asarco's creditors by stripping the company of one of its most valuable assets.

In an opinion issued Aug. 30, U.S. district Judge Andrew Hanen "did not find the requisite fraud, injustice or unfairness" to justify Asarco's claims the Mexican miner schemed to strip Asarco of its stake in Southern Peru Copper Corp -- which changed its name to Southern Copper Corp (PCU.N) in 2005 -- that helped push Asarco into bankruptcy protection.

Grupo Mexico (GMEXICOB.MX) said it was happy with the court's ruling that it paid a fair price in 2003 to its subsidiary, Tucson, Arizona-based copper miner Asarco LLC, for the U.S. company's stake in miner Southern Copper.

"We are pleased," Grupo Mexico's Americas Mining Corp unit said in statement. But Grupo Mexico said it would appeal certain aspects of the ruling.

Asarco, which owns three copper mines in Arizona, filed for Chapter 11 bankruptcy protection in 2005 after it was sued for $1 billion over environmental clean-up and asbestos claims. Its total asbestos and environmental liabilities are estimated to be at least $3 billion.

Lawyers for Asarco argued that Grupo Mexico made no effort to solicit bids for Asarco's 54.2 percent ownership stake in Southern Copper because their real intent was to defraud Asarco's creditors.

Hanen, who sits in U.S. District Court in Brownsville, Texas, said he did not believe Grupo Mexico acted with actual malice in the transaction and there was no evidence the Mexican miner had done the transaction for the main purpose of defrauding Asarco's creditors.

In its opinion, the court also dismissed conspiracy charges and punitive damages claims brought against Grupo Mexico's U.S. unit by Asarco.

Grupo Mexico is in a separate legal battle to win back control over Asarco, which is run by an independent board due to the bankruptcy, and is trying to stop Sterlite Industries Ltd's (STRL.BO) (SLT.N) $2.6 billion bid for the U.S. miner.

Sterlite Industries, an Indian unit of London-listed Vedanta Resources Plc (VED.L), was the highest bidder in an auction for Asarco's assets in May and has said it would buy the operating assets of Asarco in an all-cash deal. (Reporting by Jason Lange and Emily Chasan; Editing by Andre Grenon)