Federal govt dragged into Palmer-WA stoush

·2-min read

Billionaire Clive Palmer has asked the Federal Court for help in dodging "draconian" laws preventing him from obtaining amounts owed to him by the Western Australian government.

The lawsuit, filed on Friday, is brought against the Commonwealth of Australia, which has been threatened with arbitration over the $30 billion spat, as well as the WA government and the state's State Development, Jobs and Trade Minister Roger Cook.

This marks the next chapter in Mr Palmer's ongoing legal battles over the development of the Balmoral South iron ore mine in WA's Pilbara region.

A dispute first arose between two Palmer firms Mineralogy and International Minerals and the state government in 2012. This went to arbitration with the mining magnate emerging mostly as the victor after two decisions in May 2014 and October 2019.

In response, the WA government under Premier Mark McGowan brought in emergency legislation in August 2020.

This law terminated the arbitration, voided any awards granted to Mr Palmer and his firms, and prevented the state from having any liability towards the billionaire in related disputes.

The magnate's challenge to the act went all the way to the High Court where it was dismissed in October last year.

Palmer's Singapore-based parent company Zeph Investments has now launched action in the Federal Court alleging that the WA government expropriated an asset from its two subsidiaries, being the total award granted to it in the arbitration.

The Commonwealth is now the target, being accused of breaching the ASEAN-Australia-New Zealand Free Trade Agreement. Zeph contends that the state's conduct can be attributed to the federal government under international law.

"This Court's assistance is required to give effect to the International Arbitration Act because of the draconian terms of the WA legislation," Zeph wrote in documents filed with the court.

The WA law barred Mr Palmer's firms from questioning the state government's conduct or commencing international arbitration, meaning his companies would be "immediately liable" to pay WA any amounts gained, Zeph argued.

"(The) extraordinary terms of the Amended State Act are presently having a chilling effect on Zeph being even able to confirm an intention to bring an ICSID arbitration against the Commonwealth, lest it face the peril of immediate indemnities being enlivened," the firm wrote.

With the state government allegedly denying Mr Palmer and his companies access to justice, Zeph said there was a "real risk" that WA or Mr Cook would launch proceedings against it as a result of the newly filed Federal Court case.

"(The) terms of the Amended State Act purport to have the effect of preventing (Zeph) from even bringing this case before the Federal Court for injunctive relief."

Zeph is seeking court orders barring both the state government and the Commonwealth from taking detrimental action against it because of its lawsuit or future attempts to commence international arbitration.