Lanco Infratech Ltd announced, on Monday, that it had agreed for an out-of-court settlement of the litigation initiated by Perdaman Chemicals against its unit Griffin Coal and the Lanco Group. The protracted litigation was for payment of Australian $3.5 billion for failing to honour a coal supply agreement. Lanco has agreed to pay AUD 7.5 million, in addition to legal costs to be taxed by the Supreme Court of Western Australia, without admission of any allegations of Perdaman.
The settlement could be reached pursuant to rules of the Court that allow for early and cost effective resolution of such claims, Lanco Infratech informed the BSE. The company said it had always maintained that Perdaman’s action was baseless. If allowed to continue, the case would have taken another 12 to 14 months , resulting in significant legal costs and loss of management time for the company.
“The purpose behind making this nominal offer was to put an end to this litigation now, and move forward with our expansion plans,” Lanco said in the filing. The outcome would have a positive impact on the entire group, especially for Griffin Coal, a 100 per cent subsidiary of Lanco Group.
The company would reinforce focus on its business and mining operations in Western Australia, including the proposed expansion of the Collie mine and the enhancement of the export facilities at Bunbury port.
The company claimed that its lawyers effectively managed the defence, countered numerous applications brought by Perdaman, and provided strong support throughout.
“In the end, Perdaman had no choice but to accept nominal offer in the settlement proposed by Lanco, which is, in fact, a small fraction of the original claim,” the company said.