Wiggins Island
Coal Export Terminal

CDI Lawyers’ role in one of Australia’s largest┬áconstruction & infrastructure disputes

In Short

CDI Lawyers acted for Monadelphous Muhibbah Marine – a joint venture between Monadelphous Engineering and Muhibbah Construction – in achieving a successful outcome in one of Australia’s largest construction and infrastructure disputes.

The Project

The Wiggins Island Coal Export Terminal is located in the Port of Gladstone, with a current export capacity of 27 million tonnes per annum, and an export capability of 80 million tonnes per annum once fully commissioned. The terminal was comprised of marine facilities, including a jetty and wharf, conveyors serving a shiploader locating on the wharf, a coal stockyard and materials handling systems, and supporting rail facilities.

The development of the terminal was undertaken by a consortium of eight coal exporters (WICET), which engaged MMM to construct the offshore marine works for the terminal and manufacture, supply and commission the shiploader. MMM was a joint venture of Monadelphous Engineering Pty Ltd (part of the ASX-listed Monadelphous Group) and Muhibbah Construction Pty Ltd (a Malaysian marine contractor).

Whilst the terminal has been the subject of numerous ongoing disputes, the dispute between MMM and WICET is by far the largest generated by the project.

Our Role

CDI Lawyers was originally engaged by MMM in 2013. Early in the dispute, CDI Lawyers provided MMM with advice on risks and issues relating to entitlement and options for dispute resolution. CDI Lawyers worked closely with MMM to develop a strategy for the recovery of substantial moneys that MMM claimed to be owed by WICET.

CDI Lawyers drew on its construction law expertise to advise MMM in the development of a large number of variation, extension of time, delay cost and and acceleration claims. CDI Lawyers also briefed a team of experts from multiple different firms to deal with technical issues of delay and quantum in relation to MMM’s claims.

Across 2014 and 2015, CDI Lawyers acted for MMM in lodging 5 adjudication applications against WICET pursuant to the Building and Construction Industry Payments Act 2004 (Qld), relating to both the jetty and wharf contract and the shiploader contract. The adjudication applications concerned more than 70 EOT claims and over 250 variation claims, and were some of the largest and most factually and technically complex adjudications in Australian history.

In June 2015, WICET commenced proceedings against the MMM joint venture parties and parent companies in the Supreme Court of Queensland in relation to:

  1. restitution of amounts paid pursuant to adjudication decisions;
  2. liquidated damages; and
  3. alleged defective and non-conforming work.

Taking into account alternative relief, the statement of claim sought payment for in excess of $340 million. CDI Lawyers prepared the defence and counterclaim, which ran to 822 pages and sought payment from WICET of over $200 million.

In order to maximise collaboration and coordination within the project team, CDI established a base of operations at the MMM office in Brisbane, Queensland. This involved a team of CDI’s personnel working out of MMM’s offices alongside a large team of expert witnesses and several key project personnel that were involved in developing claims and providing evidence. The efficiency gained from this arrangement was a key factor in achieving a successful outcome for MMM.

During the course of the dispute, CDI also represented MMM in numerous related and interlocutory proceedings, including:

  1. injunctions seeking orders to prevent WICET from having recourse to approximately $40 million in security;
  2. applications for summary judgements of payment claims;
  3. multiple applications for injunctions and judicial review of adjudication decisions on the basis of jurisdictional error;
  4. an application for an injunction relating to the validity of one of MMM’s payment claims and adjudication applications;
  5. an application for an injunction seeking Mareva-style relief in respect of proceeds of an adjudication decision being paid out of the country;
  6. proceedings in relation to the provision of documents; and
  7. proceedings relating to confidential documents.

The Result

The adjudication applications prepared by CDI Lawyers resulted in awards to MMM of in excess of $255 million, as well as the grant of substantial extensions of time, and the return of the proceeds of bank guarantees which had been encashed by WICET.

Following the release of the final adjudication decision, the parties reached a confidential settlement of all outstanding disputes, including the Supreme Court proceedings and the alleged defects at the Project. The overall strong results saw Monadelphous Group’s share price increase by 45% in the months that followed.

Throughout the entire dispute process, CDI Lawyers provided consistent advice on prospects to MMM to facilitate board-level decision making and strategy, and consistently met or exceeded the forecast recovery.

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