28/01/2022 - 15:11

SIMPEC, Central Systems in court battle

28/01/2022 - 15:11

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WestStar Industrial’s engineering arm SIMPEC has taken Central Systems to court over a $7 million contract for works at FMG’s Solomon iron ore hub.

SIMPEC, Central Systems in court battle
According to a writ lodged in the Supreme Court this week, the lawsuit centers around an agreement SIMPEC claims was reached between the two parties in relation to the FMG mine works.

WestStar Industrial’s engineering arm SIMPEC has taken Central Systems to court over a dispute relating to its $7 million contract for works at Fortescue Metals Group’s Solomon iron ore hub.

FMG unveiled grand plans to develop the Solomon Central Facilities Workshop back in 2020, contracting Central Systems to spearhead the design and construction works for $57.5 million.

According to a writ lodged in the Supreme Court this week, the lawsuit centres around an agreement SIMPEC claims was reached between the two parties in relation to the completion of those works.

In the writ, SIMPEC claims it carried out a host of electrical and instrumentation works at the Pilbara-based Solomon iron ore hub for Central Systems.

Between July 2020 and January 2021, SIMPEC claims the two parties exchanged several emails before Central Systems allegedly issued a letter of award for the works.

That letter of award hinged on the two parties formally entering into a subcontract on or before January 20 2021.

But that never happened, according to SIMPEC.

Instead, SIMPEC claims Central Systems simply issued a service order and a draft subcontract and works begun.

But the following month, SIMPEC alleged Central Systems issued a cancellation of the service order and a new one with different projects.

SIMPEC rejected the new orders in April, it claimed in the writ, arguing that they did not align with its original tender submission.

The following month, SIMPEC allegedly wrote to the company outlining the contents of the initial subcontract clarifications schedule.

By June, SIMPEC claims Central Systems had indicated the remaining subcontract clarifications had been sent to its lawyers for review, and expected it to be resolved within the next week.

In the writ, however, SIMPEC claims that did not happen.

SIMPEC is now making claims in relation to the works it undertook, including increases, decreases or omissions in relation to works totalling $1 million, as well as delays and disruptions that led to costs additional costs totalling $2.1 million.

It has sought orders for a formal valuation of the works, as well as the return of $325,000 allegedly withheld by Central Systems as security.

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