Bond seizures under the spotlight at Roy Hill

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The Roy Hill Holdings is chasing a $235 million performance bond from Samsung C&T as Samsung wins a similar case against Laing O’Rourke on the Roy Hill project.

The ongoing battle between RHH and Samsung C&T has stepped up, after Roy Hill Holdings filed a writ against Samsung for breach of contract only days after it took control of the project from the contractor.

Roy Hill has previously accused the contractor of deliberately delaying the project’s construction for commercial reasons, as well as a “wast range of [other] disputes”.

The miner had demanded the bond, held by a South Korean bank, but had been halted from doing so, according to The West.

A fast resolution to the issue was then called for by the judge.

“The nature of a performance bond is payment on demand,” Justice Rene Le Miere said. “They are by nature urgent.”

At the same time Samsung and RHH faced each other down in court, Samsung C&T also won a case against subcontractor Laing O’Rourke, seizing a $7.5 million security bond in relation to operational disputes.

Laing O'Rourke had been in charge of the construction of structural steel and associated mechanical, piping, electrical and instrumentation works for the massive mine.

The contract also incorporated building the ore stockyard facilities to support the intermodal and export operations, comprising car dumpers, interconnection conveyors and transfer stations.

Roy Hill chief executive Barry Fitzgerald accused Laing O'Rourke of removing materials and equipment in breach of its contract and the termination agreement.

"Laing O'Rourke's motive for their actions has been questioned," Fitzgerald said at the time.

Another subcontractor, NRW, also faced down Samsung over issues relating to $26 million in claimed payments over earthworks, which Samsung C&T disputed.

While yet another contractor, Thai metal suppler Best Tech & Engineering (BTE), faced down Samsung over similar issues.

The court documents state BTE was contracted to supply around 15,000 tonnes of modular steel products for the iron ore mine and the Samsung refused to make contractually agreed payments, however Samsung claims that the company has breached agreements in their contract, allowing Samsung to seize a bank guarantee.