WICET's hopes of $130m pay day dashed by supreme court
The NSW Supreme Court has dashed Wiggins Island Coal Export Terminal's hopes of recovering millions in debt it claimed it was owed by New Hope Corporation.
Court proceedings began between the two companies in December last year when WICET claimed New Hope owed the Gladstone terminal millions as a result of of Northern Energy Corporation and Colton Coal Pty Ltd going into administration.
Colton Coal and Northern Energy Corporation Limited were wholly owned subsidiaries of New Hope Corporation - which was one of the five original miner owners of WICET.
Colton Coal had contracted 500,000 tonnes a year of coking coal to WICET.
But that coal never made it to the terminal, because Colton Coal and Northern Energy Corporation went into administration in October 2018.
WICET claimed New Hope Corporation needed to repay $3.6 million in unsecured claims from Northern Energy Corporation and $128.7 million from Colton Coal, under a deed of cross-guarantee.
A deed of cross-guarantee is a guarantee between a parent company and one or more of its wholly owned subsidiaries for each other's liabilities.
In February New Hope announced its intentions to challenge the allegations and sought to prove it was not bound by the deed.
Earlier this month New South Wales Supreme Court Justice James Stevenson ruled New Hope did not guarantee the obligations of the companies.
New Hope welcomed the result.
"(New Hope Corporation) is pleased to acknowledge today's decision of the Supreme Court of New South Wales and the court's conclusion that the company has not guaranteed the debts of NEC and Colton Coal under the DOCG," the company.
New Hope Coal earlier estimated it would be exposed to a liability of $130 million if the Supreme Court upheld WICET's claims.
The businesses have until July 19 to make submissions for court costs.