Gujarat NRE has been ordered to pay more than half a million dollars to one of its contractors after failing to pay an invoice submitted in December last year.
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On Monday, NSW Supreme Court Justice David Hammerschlag ordered the Illawarra-based longwall mine operator to pay engineering and manufacturing company Ampcontrol $562,390.91 plus court costs.
According to the judgment, the dispute arose after Ampcontrol was hired to design and supply more than $5 million worth of high-voltage power supply equipment at Gujarat's Wongawilli mine.
On December 20, Ampcontrol submitted an invoice for more than $1.4 million for the supply of eight switchboards and 10 electrical units.
Gujarat failed to provide a payment schedule within the time allowed by the Building and Construction Industry Security of Payment Act.
Gujarat then made some payments to Ampcontrol, but left $562,390.91 outstanding.
On May 3, Ampcontrol filed a motion with the Supreme Court to recover the unpaid money.
Gujarat argued Ampcontrol's invoice did not meet the requirements of the act.
Gujarat's lawyer claimed the progress payment sought did not correspond to any of the stages in the payment schedule the parties had agreed to.
Gujarat’s head of corporate relations Dr Chris Harvey yesterday explained the company held an ‘‘in-principle view that the invoice provided by [Ampcontrol] did not constitute a formal payment claim as it did not comply with the requirements of the contract it held with [Ampcontrol]’’.
‘‘[Gujarat] contended that substantial compliance with the contract was a threshold issue for the application of the act,’’ Dr Harvey said.
However, Justice Hammerschlag rejected those claims, saying Gujarat’s submissions could not be accepted as it had failed to provide a payment schedule within the appropriate time set out in the act.
The court found Ampcontrol’s payment was validly claimed, even though it did not correspond with any particular provision in the contract.
An Ampcontrol spokesman said the company was hopeful the matter would be resolved quickly so both parties could continue to work together in the future.
Likewise, Dr Harvey said Gujarat NRE was confident of continuing ‘‘strong and robust working arrangements’’ with Ampcontrol now the commercial dispute had been resolved.
He said the company was now undertaking a rights issue to raise further capital to underpin the projected growth of its Illawarra operations (see story above).
He also noted the NRE Wongawilli Colliery was operating and had a ‘‘full order book for the supply of coal into India’’.
