21/07/2016 - 15:28

Samsung ahead in contract dispute

21/07/2016 - 15:28

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Laing O’Rourke had a pyrrhic victory in the Court of Appeal today, when it managed to overturn a previous adverse ruling but it appears the construction contractor still won't be getting the $45 million it was awarded by an adjudicator in 2015.

Samsung ahead in contract dispute
A Court of Appeal ruling today overturned an earlier judgement.

Laing O'Rourke had a pyrrhic victory in the Court of Appeal today, when it managed to overturn a previous adverse ruling but it appears the construction contractor still won't be getting the $45 million it was awarded by an adjudicator in 2015.

That’s because of previous payments made by Samsung C&T, chief justice Wayne Martin found.

Laing O'Rourke was sub contracted for port landside work at the Roy Hill Holdings iron ore project site, where Samsung was the head contractor.

Samsung terminated that agreement in February 2015, and the two parties agreed to an interim deed, with Samsung paying $45 million in three instalments.

Laing O'Rourke subsequently took an application to an adjudicator, Graham Anstee-Brook, who in two separate rulings ordered Samsung to pay $21 million and then a further $23 million.

In the ensuing legal dispute, Samsung argued its earlier payment had been sufficient to cover that liability.

At the first court decision, a judge found the adjudicator had exceeded jurisdiction, a decision that favoured Samsung.

Today, a Court of Appeal decision found that the adjudicator’s decisions should be upheld, although in a blow for Laing O'Rourke, agreed with Samsung that the liability had already been covered.

"(Laing O'Rourke's) appeal from the decisions to quash each determination made by the Adjudicator should be upheld, the orders quashing those determinations set aside and the applications for judicial review of those determinations dismissed," Chief Justice Martin said. 

"However, as the trial judge was correct to conclude that the interim deed, on its proper construction, permitted Samsung to appropriate the amounts which it had paid pursuant to its terms against the liabilities the subject of the adjudicator's determinations, Laing O'Rourke's appeals against the decisions of the trial judge to refuse leave to enforce the adjudicator's determinations as judgments of the court should be dismissed,” he added.

It comes after a series of legal battles for Samsung following completion of work at Roy Hill.

Spanish contractor Duro Felguera had a win in late June when the court ruled its dispute would be heard in arbitration in Singapore.

The company recently suspended obligations to Samsung, such as fixing defects, after the South Korean giant had refused to issue a certificate of practical completion for work.

Decisions on enforcement applications of adjudications that had favoured Duro are due in late July, Business News understands.

NRW Holdings was involved in a series of disputes, too, for work on the project’s rail link.

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