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Adani wins appeal over unconscionable conduct ruling

Business

Adani has had a big legal victory in a court case where it sought to overturn a decision that it had engaged in unconscionable conduct and been fined $100 million.

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The company’s North Queensland Export Terminal (previously known as Abbot Point) said it was pleased to receive a unanimous judgement by the Court of Appeal.

The case related to a dispute between Adani and four of its commercial customers of an increase in terminal handling and access charges totalling $255 million.

The original case revolved around a decision by Queensland Coal, a Rio Tinto subsidiary, to stop using the port. It negotiated an agreement with Adani to shift its obligations to Adani’s mining company and paid $255 million to exit its contract.

The court was told that following that deal, Adani increased user and handling charges for other companies at the port and the trial judge held that it was unconscionable for the appellant to agree with Queensland Coal, for its departure as a user, in a way which cast an additional burden for these charges upon the remaining users, whilst also receiving $255 million.

In its appeal, Adani argued that it was denied procedural fairness and the unconscionable conduct ruling was erroneous.

The victory in the appeal will be seen by Adani as a major step in recovering its reputation.

The unconscionable conduct ruling was used by activist groups to hammer home the message that the company was not a welcome player in Queensland.

The unconscionable conduct ruling was later used by proxy adviser Glass Lewis as evidence that investors in the company’s Indian parent Adani Enterprises should vote against the re-election of a member of the risk committee.

“We are particularly pleased that the court has unanimously found that North Queensland Export Terminal did not engage in unconscionable conduct,” it said.

“We are also pleased that the decision on the 2018 and 2019 terminal handling charges is now resolved in our favour.

“We look forward to the implementation of the orders of the Court of Appeal as we move forward with the operations of North Queensland Export Terminal.”

 

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