Iron ore & coal explorer NSL wins legal case
NSL Consolidated Ltd (ASX:NSL) yesterday emerged from a trading halt, announcing that it had won a legal battle brought against it by Coal Hub Pty Ltd in August 2016.
NSL is a dual bulk commodity company, with iron ore production in India and thermal coal exploration in Australia.
On 9 February 2018, her Honour Justice Banks-Smith handed down her judgment. She found that NSL did not repudiate the Coal Acquisition Agreement dated 15 June 2011, as alleged. While NSL breached an implied term by certain delays on its part, in the circumstances its conduct has been deemed not of the nature of a repudiatory breach — therefore Coal Hub is entitled to nominal damages in the sum of A$1,000.
Coal Hub’s claim is otherwise dismissed. The issue of legal costs is to be referred to a judge to be determined in chambers at a future date.
The damages sought by Coal Hub were A$2.5 million plus costs and interest. NSL maintained that as it did not obtain unfettered access, it had no obligation to undertake drilling and in any event, it would not have established Inferred or Indicated coal resources of 500 or 250 million tonnes respectively (which would have given rise to the further payments).
In its announcement, NSL stated it feels vindicated by the Supreme Court of Western Australia’s decision, and will now make an application to seek a contribution to its legal costs from Coal Hub, Subiaco Capital and its two directors, pursuant to personal undertakings as to costs.
It’s worth noting that NSL is an early stage play and investors should seek professional financial advice if considering this company for their portfolio.
Moving on from the decision, NSL are well positioned to unlock considerable value during the course of 2018, with a strong customer base and growing production profile.