Cape Lambert Announces MCC Transfers A$80 Million into Escrow Account
Cape Lambert Resources Ltd. (ASX: CFE) (Cape Lambert or the Company) is pleased to advise that Metallurgical Corporation of China Limited (MCC) has now transferred the disputed sum of A$80 million into an escrow account held with the National Australia Bank (NAB), as directed by the arbitrator.
As previously announced, in September 2010 the Company commenced legal action in the Supreme Court of Western Australia (Court) against MCC to recover the final A$80 million payment from the sale of the Cape Lambert magnetite iron ore project in mid-2008 pursuant to an agreement between the parties (MCC Agreement). In accordance with the terms of the MCC Agreement, Cape Lambert received payments totalling A$320 million in 2008, with the final payment of A$80 million due in accordance with the terms of the MCC Agreement. Cape Lambert contends MCC are in breach of the MCC Agreement by failing to make the final payment.
In March 2013, the Court made orders referring the dispute to arbitration in Singapore and for the dispute between the Company and MCC in respect to the payment of A$80 million into an escrow account pending determination of the primary dispute (Escrow Dispute) be heard and determined by the arbitrator prior to the hearing of the substantive dispute between the Company and MCC subsidiary MCC Australia Sanjin Mining Pty Ltd.
The Company referred the dispute to arbitration in Singapore and in June 2013 a hearing was held by the Arbitrator to determine the Escrow Dispute.
The Arbitrator ordered that MCC (which has signed a guarantee in respect of MCC Australia Sanjin Mining Pty Ltd’s obligations under the MCC Agreement) pay the disputed amount of A$80 million into an escrow account in the joint names of the Company and MCC pending the determination of the substantive dispute. This amount was paid into the escrow account on 25 November 2013.
Commenting on the matter, Cape Lambert Resources Executive Chairman, Mr Tony Sage said, “While not an outcome of the substantive legal dispute, we believe the fact MCC has now complied with the order from the Arbitrator and deposited A$80 million into an externally controlled escrow account in Australia, pending the outcome of the legal action, is important and may see a resolution to this matter in a more expedited fashion.”
Cape Lambert Resources Ltd.
Tony Sage, +61 8 9380 9555