10/11/2015 - 12:25

NRW, Samsung reach $30m settlement

10/11/2015 - 12:25

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NRW Holdings has accepted a payment of $30 million to settle its dispute with Samsung C&T over work on the Roy Hill iron ore project, despite having been awarded $35 million through adjudications under the Construction Contracts Act.

NRW, Samsung reach $30m settlement

NRW Holdings has accepted a payment of $30 million to settle its dispute with Samsung C&T over work on the Roy Hill iron ore project, despite having been awarded $35 million through adjudications under the Construction Contracts Act.

In a statement today, NRW said it would receive $30 million from Samsung as a final settlement, with all litigation actions to be withdrawn.

Neither party is entitled to any further claims.

Samsung has also issued NRW with a certificate of practical completion for its work on the Roy Hill project.

NRW has never revealed the full amount in dispute with Samsung, but stated in its 2015 profit report that the dispute had contributed to a $157 million impairment.

It disclosed last month that it had won $35 million through adjudication, but Samsung had continued to contest the payments though either judicial review or by resisting enforcement.

NRW responded by taking action in the Supreme Court, which ruled last month in the contractor's favour in respect of two adjudications worth $17.5 million and $8.5 million.

Chief executive Julian Pemberton said the company’s objective through the legal process had been to agree to a fair commercial settlement with Samsung.

“Our FY15 accounts recognised the importance of concluding an agreement and securing the resulting cash inflow from that agreement,” he said.

“This agreement avoids continued negotiations, the contractual arbitration process and the legal cost of pursuing that process, all of which have no certainty of outcome.

“Given the protracted nature of the discussions and dispute resolution process with Samsung, this settlement allows us to rule a line under the issue, provides the company with improved financial capability and enables management to focus fully on successful delivery of our current projects and on securing new work.”

NRW shares rose 4 per cent to 13 cents each at 12:30pm.

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