Griffin Coal, a subsidiary of Lanco Infratech Ltd in Australia, on Monday said the protracted litigation for a claim of AUD 3.5 billion initiated by Perdaman Chemicals against it has been settled.
According to a release issued by Lanco, the Australian coal miner has agreed to pay Perdaman a nominal amount of AUD 7.5 million, plus legal costs to be taxed by the Court, without admission of any of the allegations of Perdaman.
Lanco is in a legal battle with Australia's Perdaman Industries, which filed an AUD 3.5 billion (around Rs 19,600 crore as per latest exchange rate) lawsuit against Lanco in Australia in 2011, alleging non-compliance with coal supply pact for the company's upcoming urea plant in Western Australia.
This settlement was reached pursuant to the rules of Supreme Court of Western Australia, which allows for early and cost effective resolution of such claims, the release said.
Lanco has always maintained that Perdaman's action was baseless and without any merit. If allowed to continue, this case would have taken another 12 to 14 months for the trial and judgment, resulting in significant legal costs and loss of management time, the release said.
"The purpose behind making this nominal offer was to put an end to this litigation now and move forward with our mine expansion plans," it said.
This outcome will have a positive impact on the entire group, and especially for Griffin Coal, a 100% subsidiary of Lanco, it further said.
"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 release claimed.
The company will reinforce its 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 the Bunbury port, the release said.
Backed by the settlement news, shares of Lanco Infratech gained nearly 10% to Rs 11.56 on the BSE in the early trade on Monday.