Lanco Infratech Ltd has settled the multi-billion dollar litigation with Perdaman Chemicals of Australia , agreeing to pay up A$7.5 million to the latter.
The diversified infrastructure company had been facing protracted litigation for a claim of $3.5 billion initiated by Perdaman Chemicals against Griffin Coal, owned by a Lanco subsidiary Lanco Group and its officers.
Cost-effective
With this out-of-court settlement, the case lodged in the Supreme Court of Western Australia has now come to an end.
The Lanco management has agreed to pay Perdaman this nominal amount plus legal costs to be set by the Court, without admission of guilt in any Perdaman’s allegations.
Nagaprasad Kandimalla, Chief Executive Officer, Business Development, Lanco, said: “This settlement was reached pursuant to the rules of the Supreme Court of Western Australia. It allows for early and cost-effective resolution of such claims.”
Nominal offer
He 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 12-14 months for trial and judgment, resulting in significant legal costs and loss of management time.
“The purpose behind making this nominal offer was to put an end to this litigation now and move forward with our mine expansion plans,” he said speaking over phone from Australia.
Positive impact
This outcome would have a positive impact on the entire group, especially on Griffin Coal, a hundred per cent subsidiary of Lanco’s.
With this development, 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.
In the end, Perdaman had no choice but to accept the nominal offer in the settlement proposed by Lanco, which is a fraction of the original claim. Perdaman had filed a case in May 2011 for what it maintained was Lanco’s failure to meet contractual obligation, and sought damages.
It tried to implead ICICI Bank but the court had rejected it.
Lanco shares gained by over 10 per cent during Monday’s trade to close at Rs 11.60.