Guernsey corporation drops legal action against Bermuda company Merlin Group Securities Ltd., a Guernsey corporation, has dropped legal action against Bermuda exempted company Nelson Trade and Finance Ltd.

Merlin, represented by Appleby Spurling & Kempe, had filed a writ with Bermuda's Supreme Court seeking $2 million from Nelson Trade.

The company also sought an injunction to prevent Nelson's annual general meeting from taking place last week.

"Following talks both parties agreed to discontinue the action,'' said lawyer Mr. Doug Molyneux, senior associate with M.L.H. Quin & Co.

Under the Companies Act, Nelson said it plans to change its name to Nelson Gold Corporation Ltd.

The new name will better reflect the companies mineral interests, said Mr.

Molyneux, assistant secretary of Nelson.

Toronto-listed Nelson last November completed its acquisition of Commonwealth & British Minerals Ltd. (CBM).

The company owns the issued and outstanding shares of CBM, which, through subsidiary companies, controls a 49 percent interest in the Zeravshan Mining Project in the Republic of Tajikistan.