Court rules in favor of WEC in case against Bayan

By Romel S. Gurky

ASX-listed White Energy Company Limited (WEC) said on Wednesday that the Singapore International Commercial Court (SICC) has ruled in favor of the company in a second tranche trial against IDX-listed coal mining firm PT Bayan Resources Tbk (BR).

WEC through subsidiaries BCBC Singapore Pte Ltd (BCBCS) and Binderless Coal Briquetting Company Pty Limited (BCBC) filed lawsuit against BR and its subsidiary Bayan International Pte Ltd in connection with dispute over a joint venture agreement in PT Kaltim Supracoal (KSC, 51% owned by WEC), which operates the Tabang coal upgrading plant, located at Bayan?s Tabang mine in East Kalimantan.

The second tranche of the trial was heard by the SICC in January 2017. The SICC released its judgment in relation to the second tranche of the trial late on Tuesday.

?The company is pleased to announce that the SICC found in favor of BCBCS and BCBC on substantially all of the issues heard by the SICC. In short, the SICC has found that BR was in breach of its coal supply obligation and had further repudiated the joint venture,? WEC said in a statement Wednesday

The company said a third tranche of the trial will be required to determine issues of causation and damage. The court released in April of last year its judgement in relation to the first tranche of the trial among others dismissing the counterclaims brought by Bayan, WEC said.

The second tranche of the trial dealt primarily with the following issues:
? Whether BR was under an obligation to ensure the supply of coal to the joint venture;
? If so, whether BR had breached its coal supply obligation;
? Whether BR or BCBCS was in repudiatory breach of the JV Deed; and
? If BR were found to be liable for breach of its coal supply obligation and/or repudiation of the JV Deed, whether as a result of such breach, BCBCS suffered loss.

The Company is still reviewing the judgement however the findings of the SICC include the following:
? BR was under an obligation to ensure that its subsidiaries supplied coal to KSC in accordance with the Coal Supply Agreements;
? BR had breached its coal supply obligation in:
(i) instructing its subsidiaries to cease supply of coal to KSC;
(ii) conveying to KSC that it would not be performing its obligations when the time for the performance of these obligations arrived; and
(iii) conditioning its performance of its coal supply obligation on BCBCS / WEC buying out its 49% stake in KSC for US$45 million.
? BCBCS did not commit any repudiatory breaches of the JV Deed.v? BR repudiated the JV Deed by breaching its coal supply obligation and wrongfully issuing a Termination Notice.
? The Court held over the issue of causation to Tranche 3, to be determined together with the issue of damages.

?White Energy (BCBCS) will now commence preparations for Tranche 3 of the proceedings, seeking damages and costs,? WEC said.

The White Energy group had invested over US$110 million in the Tabang project in Indonesia up until 2012 when BR repudiated the joint venture.

Editing by Reiner Simanjuntak