Inaugural SICC decision turns up heat on coal contract

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The first written judgment of the Singapore International Commercial Court (SICC) provides insight into Singapore’s approach to contractual interpretation. The case involved a joint venture dispute between parties in Australia and Indonesia, with associated companies in Singapore, over the construction and commissioning of a coal briquette processing plant in Indonesia. In a very comprehensive judgment, the SICC considered the obligations of the parties under a joint venture deed, along with other project agreements and side deeds.

KEY FACTS

An Australian company, Binderless Coal Briquetting Company (BCBC), held an exclusive licence for the “binderless coal briquetting process” (BCB process), by which raw coal is processed into briquettes with higher calorific value and lower moisture content than normal. Bayan International (BI), a Singaporean entity, was part of the Bayan Resources Group (BR), an Indonesian group of companies with interests in coal.

inaugural-sicc-decision-turns-up-heat-on-coal-contractBCBC and BI agreed to construct and commission a plant in Indonesia employing the BCB process, and that companies related to BI would supply coal to the facility. In January 2007, the parties established the joint venture company Kaltim Supacoal (KSC) in Indonesia. BCBC Singapore (BCBCS), a Singaporean company in the same corporate group as BCBC, would hold 51% of the shares, with PT Bayan Resources TBK, a publically listed Indonesian entity in the Bayan Resources Group, holding the remaining shares.

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ANDREW STEPHENSON is a partner with Corrs Chambers Westgarth in Melbourne.
LINDSAY HOGAN, a senior associate at the firm, and JACLYN SMITH, an associate, also contributed to this article.

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