Metallurgical Corporation of China has been ordered by a Singapore-based arbitrator to place $80 million into an escrow account pending the determination of a dispute with Cape Lambert Resources over the 2008 sale of the Perth company’s namesake iron ore project.
Cape Lambert launched proceedings against MCC in September to recover the final $80 million due under the sale agreement for the Pilbara mine, which was signed in mid-2008.
The company had received a total of $320 million prior to launching arbitration proceedings in the Supreme Court of WA.
The court referred the dispute to arbitrators in Singapore in March this year.
Today, the arbitrator ordered MCC to pay the outstanding $80 million into an escrow account under the joint names of Cape Lambert and MCC.
“While not an outcome of the substantive legal dispute, we believe the order from the arbitrator is a significant victory to Cape Lambert and its shareholders,” Cape Lambert chairman Tony Sage said in a statement.
“We are seeking $80 million plus interest, so to have MCC deposit $80 million into an externally controlled escrow account in Australia, pending the outcome of the legal action, is important and may see a resolution to this matter in a more expedited fashion.
“The deposit will secure recovery of any final award in this arbitration avoiding any delay or difficulties forcing an award in China.”
At close of trade today, Cape Lambert shares were up 3.2 per cent, at 16 cents.