Terming a AUD 3.5 billion lawsuit filed by Perdaman as "baseless", Lanco Infratech today said the company is ready to comply with the tenets of its coal supply agreement with the multi-national firm.
"Lanco has not terminated the coal supply agreement. We are ready to comply with the pact, which is in place," Prasad Kandimalla, CEO, who also heads Business Development in the power and infrastructure verticals of Lanco Infratech, said.
"[Against this backdrop] Perdaman's claims are baseless and there is no merit in it," he told PTI.
Multinational Perdaman Industries has filed an AUD 3.5 billion (about Rs 16,600 crore) lawsuit in the Supreme Court of Western Australia, alleging that Lanco is not complying with a 25 year-long coal supply pact for its upcoming Collie urea plant in Western Australia.
Perdaman had entered into the pact with Griffin Coal, which was snapped up by Lanco for AUD 730 million in March this year.
The coal supply of about 2.7 million tonne per annum is to start in 2015, when the urea plant project is expected to achieve financial closure, Kandimalla said.
"We are fully prepared to face Perdaman's lawsuit. We will have to study the claims [made by Perdaman]," he said.
According to Australia-based Perdaman, which is currently focused on urea production, Lanco is not complying with the coal supply agreement, worth billions of American dollars.
The lawsuit has been filed by Perdaman Chemicals and Fertilisers, whose parent company is Perdaman Industries. The Griffin Coal mine has a resource base of over 1 billion tonne and the referred contract with Perdaman is approximately for 2.75 million tonne per annum.
"Because of Lanco's conduct under the Australian consumer act, Perdaman is facing road blocks with regards to the works of the proposed $3.8 billion urea plant and have also suffered damages," Perdaman Chemicals and Fertilisers Pty Ltd Chairman and Managing Director Vikas Rambal had said.
On Friday, Lanco had said that it would "vigorously" defend against the lawsuit.
"So far, Perdaman has not filed a statement of claim in the Supreme Court of Western Australia explaining the basis for its claim and in particular, how it arrived at a damages claim of that amount.
"If those documents are filed, then Lanco Infratech will vigorously defend these claims in court," Lanco noted.
The final agreement for the coal supply was signed with Griffin in December, 2010.