23/07/2008 - 09:14

Federal Court dismisses Clough's appeal

23/07/2008 - 09:14

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The Federal Court of Australia has dismissed engineering company Clough Ltd's appeal against an earlier decision to lift an interim injunction over the disputed G1 project in India with client ONGC.

Federal Court dismisses Clough's appeal

The Federal Court of Australia has dismissed engineering company Clough Ltd's appeal against an earlier decision to lift an interim injunction over the disputed G1 project in India with client ONGC.

The Perth-based company said the injunction prohibited the payment of performance guarantee bonds amounting to $US21.5 million.

The Full Court's orders will not be entered prior to Friday 25 July 2008, pending any application for further relief that Clough may seek.

Clough said further advice will be issued should it seek and be granted relief, otherwise the effect of today's decision is that encashment of the performance guarantee bonds will become automatic.

The company added there would be no change in the accounting position should the bonds be cashed before the end of this week.

"Further, the company commits to continue with the rigorous pursuit of its rights under the contract as it continues to seek a negotiated settlement with ONGC," Clough said.

Last year, the contract dispute between both companies deepened after ONGC submitted a counterclaim worth $US1.2 billion.

Clough had previously said that the counterclaim ignores the limits of liability contained in the contract and is substantially for the recovery of consequential damages which are explicity excluded by the contract

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