Clive Palmer’s Zeph Investment’s second case against Australia is a $41.3bn claim that it breached the Asean free trade agreement in relation to coal exploration permits, it has emerged.
The Attorney General’s Department has revealed that since the May budget, when Guardian Australia first reported on the claim, Palmer’s company has formally launched the second investor-state dispute against the commonwealth.
The department said it would “vigorously” defend the second case, labelling the $41.3bn damages claim “unsubstantiated”.
In the first claim, Singapore-based Zeph Investments is seeking $296bn for an alleged breach of the Asean free trade deal over Western Australia’s extraordinary law to prevent Palmer from seeking compensation over his massive Pilbara iron ore project.
New details of the second claim are contained in answers to a question on notice from the Greens senator David Shoebridge.
The department revealed that Zeph had escalated the dispute from a notice of intention to commence a second investor-state dispute on 21 February to “a notice of arbitration formally commencing the arbitration”.
“Zeph alleges that Australia has breached certain obligations owed to it under chapter 11 of the agreement establishing the Asean-Australia-New Zealand free trade area,” the department said.
“Australia will vigorously defend the claim. The dispute relates to certain mineral exploration permits held by Mr Palmer’s Australian company, Waratah Coal Pty Ltd, in the Galilee Basin of Queensland.”
The department said in its parliamentary response that Waratah Coal is 100% owned by Australian company Mineralogy Canada Acquisition Corp Pty Ltd, which is in-turn 100% owned by Palmer’s Australian company Mineralogy.
“Zeph acquired 100% of the shares in Mineralogy in January 2019. The notice of arbitration indicates that Zeph is claiming damages of approximately AU$41.3bn. Zeph’s damages claim is unsubstantiated.”
In May Guardian Australia revealed that in addition to the first claim, formally launched in March, “the commonwealth has also received requests for consultations from the same claimant [Zeph] in relation to two other potential claims”, suggesting that there is a third potential claim in the works.
In May the Attorney General’s Department said the “requests for consultations from Zeph on two potential claims were “unrelated on their facts to the arbitration already on foot”, confirming they are new matters that could expose Australia to further legal liability.
In March a spokesperson for the attorney general, Mark Dreyfus, said in relation to the first claim: “We will vigorously defend Australia’s interests.
“The commonwealth will work with Western Australia to ensure Australia’s interests are protected.”
In a statement at that time, Palmer said: “If any windfall was to come to Mineralogy, the funds would be used for public good.”
He suggested this could include spending on WA hospitals and a “new independent daily newspaper in WA which doesn’t rely on cartoons to sell copies”, in reference to a report in the West Australian.
Guardian Australia contacted Palmer for comment.
