March 8 (Bloomberg) -- ICICI Bank Ltd. can’t be sued in Australia over its role in a A$5.8 billion ($5.9 billion) dispute regarding the termination of a coal-supply agreement and the scuttling of a proposed urea plant, a judge ruled.
Perdaman Chemicals & Fertilisers Pty sued the bank, accusing it of illegally interfering with a coal-supply agreement that the fertilizer maker had with Griffin Coal Mining to allow for the miner’s acquisition by Lanco Infratech Ltd., an Indian power producer.
Federal Court Justice Neil McKerracher on March 6 refused Perdaman’s request to formally serve the bank with the lawsuit in Singapore, where the Mumbai-based bank’s branch issued a loan to Lanco. Perdaman had to show there was enough evidence that the bank broke the law and required the judge’s permission because ICICI Bank has no business presence in Australia. The fertilizer maker failed to make its case, the judge said.
“At worst, the bank drove a hard bargain as it was entitled to do,” McKerracher wrote in his ruling, issued in Perth, Western Australia.
Lanco bought Griffin Coal, which had filed for bankruptcy, in February 2011, using an A$800 million loan from ICICI Bank to partly finance the acquisition, according to court papers. Lanco decided it would be to its advantage to cancel Griffin’s coal-supply agreement with Perdaman, citing that it failed to meet all conditions of the deal, and sell the reserves for a better price, Perdaman argued.
The bank, as part of the financing, obtained security over Griffin Coal and those obligations deprived the mining company of the ability to execute the coal-supply agreement without the bank’s consent, Perdaman said.
ICICI Bank “was entitled to protect its own interests and to impose and to adhere to whatever security requirements it could achieve,” McKerracher wrote. “The bank had no obligation to Perdaman.”
Perdaman sued Lanco and Griffin, claiming the termination of the coal supply prevented it from getting financing to begin construction on the urea plant.
Griffin is seeking to have a trial date set in the Supreme Court of Western Australia, Nagaprasad Kandimalla, a director at the mining company, said in an e-mailed statement.
The company wants the trial “as soon as possible,” Kandimalla said.
The trial will likely be held later this year, McKerracher said in his ruling.
The case is Perdaman Chemicals & Fertilisers Pty v ICICI Bank Ltd. WAD1/2013. Federal Court of Australia (Perth).
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