Southern Cross Electrical Engineering (SCEE) has agreed a full and final settlement of its dispute with Decmil Group regarding the sub-contract between them for works at Rio Tinto’s Amrun mine project in Queensland.
Decmil, which offers a diversified range of services to the Australian resources and infrastructure sector – including engineering and construction, accommodation services, and maintenance – issued a similar notice to the ASX.
Both companies said the settlement was in line with their accounting position and the ongoing arbitration proceedings concerning this dispute would be terminated.
The remaining terms of the settlement are strictly confidential and both parties did not intend to make further comment on the matter.
The conflict centred around a sub-contract SCEE entered with Decmil to design, supply and construct the electrical, communications, instrumentation and controls for the non-processing facilities at Amrun.
SCEE contended it successfully delivered its works, with Rio Tinto issuing a press release in 2019 that it had completed commissioning of the project.
The original sub-contract sum was for an amount of $6 million exclusive of GST. In the course of the project, SCEE claimed it carried out substantial additional works beyond the original subcontract scope and also experienced significant delay and disruption because of Decmil’s alleged failure to properly manage its works and other subcontractors.
SCEE demobilised from site at the end of 2018 and in early 2019 SCEE and Decmil agreed a process to negotiate in good faith the assessment and close-out of SCEE’s claims.
In May 2019 the process concluded without resolving the matter, which led SCEE to pursue its claims for payment against Decmil through the formal arbitration process as per the provisions of the sub-contract.