12/03/2021 - 15:28

Tianqi appeals court ruling

12/03/2021 - 15:28

Bookmark

Save articles for future reference.

Embattled Chinese mining company Tianqi Lithium has appealed a court order that it repay a $38.8 million debt to Perth-based engineering consultancy MSP Engineering.

Tianqi appeals court ruling
Supreme Court Master Craig Sanderson ruled that the Chinese-owned company should have to repay the debt to MSP, but the company has appealed the decision. Photo: Gabriel Oliveira

Embattled Chinese mining company Tianqi Lithium has appealed a court order that it repay a $38.8 million debt to Perth-based engineering consultancy MSP Engineering, three weeks after the ruling.

Last month, Supreme Court Master Craig Sanderson ruled that the Chinese-owned company should have to repay the debt, which related to two contracts MSP held for the construction of its billion dollar Kwinana lithium hydroxide processing plants.

According to court documents, Tianqi paid MSP Engineering $9 million between August 2019 and January 2020, but has since failed to pay the remaining balance, which stands at more than $35.8 million.

Tianqi issued notices of dispute under the contract and a show cause notice before issuing a termination notice in August 2020 because MSP had failed to comply.

Tianqi had argued that the contracts were liable to be set aside and that any contractual rights MSP may have could not be enforced prior to a determination on its ongoing arbitration, but Master Sanderson ruled in favour of MSP.

Earlier this week, Tianqi was served with a payment order stating that it must repay MSP before March 15, but the company is understood to have applied for a suspension on the order in a bid to appeal it and pursue its $220 million counterclaim over an alleged breach of contract.

In a statement released on the Chinese stock exchange overnight, Tianqi claimed it should not have to pay the sum on the basis that MSP Engineering had allegedly breached the contract agreement when it failed to complete the project on time, allegedly resulting in losses for the company.

While acknowledging that the lawsuit may affect the liquidity of the company and the progress of the commissioning of the project, Tianqi said it would take the necessary steps to minimise the impact.

If the appeal is unsuccessful and the company is unable to pay on schedule, Tianqi said the legal battle may further increase the pressure on its capital and adversely affect its performance this year.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options