THE PROPOSED STATEMENT OF CLAIM AGAINST THE BANK - FACTS AND CONTENTIONS
26 With the application, Perdaman filed a statement of claim which reflected many of the matters in the Supreme Court pleading but brought in claims against the Bank. Much of the material provided only contextual background material to any claim against the Bank. But it is necessary, as counsel for Perdaman fairly argued, to consider the whole of the pleading to see how the Bank could be viewed as being at fault for losses sustained by Perdaman.
27 The following facts emerge from the draft pleading on which Perdaman relies:
28 Perdaman was established in 2006 for the sole purpose of developing a world scale 'leading edge technology' urea fertiliser plant in the south west of Western Australia using coal as essential feed stock. Griffin, a coal miner, was placed into voluntary administration on 3 January 2010. Between that date and 28 February 2011, it traded in administration by its joint and several voluntary administrators. Lanco Australia acquired all the issued share capital in Griffin and Griffin entered into a deed of company arrangement (DoCA) on 28 February 2011, exiting its administration and selling the shares.
29 Lanco is a leading infrastructure developer in India and elsewhere carrying on business in power generation, construction, property development and in the solar sector. It caused Lanco Singapore to be incorporated on 6 December 2010, holds its shares and also holds the shares in Lanco Australia, incorporated on 13 December 2010. Since the acquisition of shares in Griffin, Lanco has been the ultimate holding company of Griffin.
30 The CSA entered into on 21 December 2010 was for an initial term of 25 years. Perdaman and Griffin were to negotiate in good faith to agree the coal price. The price was agreed and included an escalation component. On administrators being appointed to Griffin from January 2010 onwards, the administrators made it clear that the agreed coal price, including the escalation, was not sustainable for Griffin and accordingly the price was renegotiated.
31 The infrastructure associated with establishing the urea plant was extremely expensive. In order to progress and develop the Project, Perdaman carried out extensive investigations, negotiation and preparatory work. It incurred costs, it says, until May 2011 of approximately $195 million (Perdaman Project costs) including payment for numerous consultants in consequence of which the Project had advanced to the point where it was for a variety of reasons poised to proceed. One of the features of the preparation of the Project was the entry into the Coal Supply Heads of Agreement on 13 October 2008. Following a subsequent presentation of the Perdaman Project to potential financiers, Perdaman pleads that it 'was on the cusp of achieving Financial Close' as at May 2011.
32 By cl 25 of the CSA, 'Financial Close' meant the date at which Project financing of the funding required for the Perdaman Project had been provided on terms acceptable to Perdaman and all conditions precedent for such funding had been sustained and initial funds had been drawn down by Perdaman. The CSA was conditional (by cl 24) on execution of an inter-creditor deed and other securities known as the 'CSA Security Documents' occurring on or before the condition precedent date. That date was relevantly, six months after Griffin exited administration on 28 February 2011, namely, 28 August 2011.
33 Perdaman was to report to Griffin promptly after any event which was material to satisfying the conditions precedent by a condition precedent date and to provide detailed updates every month or at such intervals as may reasonably be required by Griffin. Griffin, in turn, was to cooperate in making reasonable endeavours to assist Perdaman with any due diligence obligations relating to achieving Financial Close. There were other obligations imposed upon Griffin of like nature.
34 Additionally, if Griffin was unable to supply coal in accordance with the terms of the CSA at any time, then Perdaman was to have the right to step-in to Griffin's operations to the extent and for so long as would be necessary to ensure deliveries from the Griffin mine were restored and maintained in accordance with the terms of the CSA (the 'step-in' right). Additionally, while doing so, Perdaman was to ensure that the operations were conducted so as to meet the contractual obligations owed by Griffin to all customers including Perdaman.
35 Perdaman contends in its first statement of claim that Griffin was obliged to execute the CSA Securities when reasonably required by Perdaman to do so. Further, no right to termination conferred by the CSA would be available to Griffin for so long as a breach by it of the CSA caused Perdaman to be unable to satisfy, by the condition precedent date, the conditions referred to in cl 24.1(a).
36 The statement of claim deals with the importance to Perdaman of and benefits of acquisition of coal from Griffin rather than other sources.
37 The statement of claim then sets out how Lanco funded its acquisition of Griffin. On 9 February 2011 Lanco Singapore and Lanco Australia entered into a Facility Agreement with the Bank at its Singapore branch and the Bank of New York Mellon under which Lanco Australia agreed to borrow $800 million from the Bank (the Facility Agreement). By the terms of the Facility Agreement, each of Lanco Singapore and Lanco Australia (the Lanco parties) covenanted to require Griffin (fully owned by Lanco), after the completion of the acquisition of Griffin by Lanco Australia, to enter into a Negative Pledge deed in terms contrary to the CSA and, in particular, contrary to the obligations on the part of Griffin pursuant to cl 24.1(a)(ii), cl 24.2(c) and/or the implied terms to do everything necessary to execute a deed of charge and to execute the CSA Securities. The Negative Pledge would, in broad terms, prevent Lanco from creating any security interest which might relevantly compete with the Bank's security, or cause it to be deferred.
38 Perdaman contends that by 5 May 2011, the Lanco parties, and after 28 February 2011, Griffin, had determined that it would be commercially advantageous for them to cause the termination through non-fulfilment of the condition precedent of the CSA. This would avoid Griffin's obligations to hold coal reserves for, and supply coal to, Perdaman as required by the CSA and enable Griffin to direct coal supply elsewhere at a better price. This in turn would cause Perdaman to re-negotiate the coal price. This is the key to the claim against Lanco and Griffin.
39 But the question for present purposes is how the Bank is 'hooked in' to that conduct. The Bank comes into the picture, on the statement of claim, between March 2010 and February 2011 when it undertook its own due diligence of Griffin's mine and operations and the Lanco parties' operations with a view to funding the Lanco parties' acquisition of Griffin.
40 The statement of claim then reverts to the subsidiary complaints against the Lanco parties. It contends that from 18 March 2011 to 6 April 2011, arrangements were made for a group of approximately 11 representatives of the joint financiers to attend on a due diligence tour of Griffin. The statement of claim refers to a 'chain of emails' in which it sought assistance from Lanco and its directors to achieve 'Financial Close' as the date was approaching.
41 On 18 April 2011, Griffin wrote to the Bank sending an executed deed of mortgage and deed of charge in the form of Sch 7 and Sch 8 of the CSA. It requested the Bank to issue a 'no objection' letter to send those documents to Perdaman. However, by letter from the Bank (the Singapore branch) to Griffin on 20 April 2011, the Bank informed Griffin that it rejected Griffin's request that it issue a 'no objection' to Griffin sending the documents to Perdaman. In the meantime, on about 4 May 2011, arrangements had been agreed with the Lanco parties and Griffin for the final inspection by financiers to take place on 10 May 2011.
42 Perdaman contends that Griffin and the Lanco parties knew at this stage that Perdaman was 'on the cusp' of achieving financial close but notwithstanding this, they interfered with and disrupted the final inspection and financial close. Perdaman relies on letter of 5 May 2011 sent from Griffin to Perdaman pointing out the requirement of reasonable endeavours to achieve execution on or prior to the condition precedent date of the CSA Securities. The letter from Griffin goes on to say that its acquisition was financed by the Bank and, under the financing terms, the Bank had certain rights as regards securities over Griffin. Griffin advised that pursuant to its obligations under the CSA, it had attempted to procure the Bank's consent to the granting of securities by Griffin for the purposes of the CSA but so far the Bank has refused to grant that consent. The letter assured Perdaman that Griffin would continue to endeavour to procure the Bank's consent and bring about the execution of the CSA Securities.
43 The same letter continued on a different topic, observing that since completion of the acquisition, Lanco had discovered that the operations may not be financially sustainable in their present form. It wished Perdaman to participate in discussion about future business plans. There were exchanges of correspondence concerning this letter and various meetings and discussions.
44 On some date in the period between 12 and 21 June 2011, without knowledge or consent of Perdaman, Griffin executed the Negative Pledge and in so doing bound itself to obligations to the Bank. Those obligations deprived it of the ability to execute the CSA Securities without the consent of the Bank. Perdaman alleges, as against Lanco and its directors, wrongful assertions as to the Bank's consent requirements, wrongful entry into the Negative Pledge and refusal and failure to execute the CSA Securities.