06/05/2021 - 14:32

Thyssenkrupp sues Monadelphous over BHP South Flank work

06/05/2021 - 14:32

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Thyssenkrupp Industrial Solutions has launched legal action against Perth-based engineering group Monadelphous for allegedly harbouring vital documents.

Thyssenkrupp sues Monadelphous over BHP South Flank work
In a writ filed in the Supreme Court this week, Thyssenkrupp has appealed for a declaration from the court that would force Monadelphous to hand over various documents essential for the operation and maintenance of two iron ore stackers.Photo: Attila Czar

Thyssenkrupp Industrial Solutions Australia has launched legal action against Perth-based engineering group Monadelphous for allegedly harbouring vital documents for infrastructure it built at BHP’s $3.4 billion South Flank project.

In a writ filed in the Supreme Court this week, thyssenkrupp has appealed for a declaration from the court that would force Monadelphous to hand over various documents essential for the operation and maintenance of two iron ore stackers and a reclaimer Monadelphous constructed and tested as part of a subcontract.

According to the writ, thyssenkrupp signed a contract with BHP Iron Ore back in September 2018 to design and construct the two iron ore stackers and one iron ore reclaimer for BHP’s South Flank iron ore project.

In November 2019, thyssenkrupp subcontracted certain parts of the work to assemble and construct the iron stackers and reclaimer to Monadelphous.

Although the value of the subcontract is not clear, Business News can confirm that the deal was one of four Monadelphous secured in the resources and energy sector during that time worth a combined $110 million.

The terms of the contract included reaching practical completion of the project between December 2020 and February 2021 and handing over the documents required for the operation and maintenance of the infrastructure. 

According to thyssenkrupp's writ, the scope of the works included the production of as-built drawings, signed off by a representative of BHP, as well as a manufacturer’s data report with redline drawings, inspection and test plans, test results, reports and check sheets. 

The contract featured a clause which required Monadelphous to submit the documentation in both hard copy and electronic format.

In a letter dated February 2021, Monadelphous claimed to have achieved practical completion of the first component of the subcontract and, the following month, sent a second letter claiming it had completed the final component.

But despite the claims, and allegedly in breach of the contract, thyssenkrupp claims in its writ that Monadelphous failed to produce the documents required.

As a result, thyssenkrupp claims it is unable to comply with its operations to commission and complete the contract and is now rendered liable to BHP for damages for breach of contract.

Thyssenkrupp’s ability to thwart any potential legal action by BHP now hinges on its ability to acquire a declaration from the court that would require Monadelphous to hand over the documents.

The company also wants Monadelphous to cover the court costs and pay any other costs the court deems fit.

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