GR Engineering Services Limited (ASX:GNG) (GR Engineering) provides the following update to the market in relation to proceedings in the Supreme Court of Western Australia against Eastern Goldfields Limited (ASX:EGS) (EGS) and others, to recover payments of approximately $9.9 million (plus interest and costs) associated with outstanding progress and variation claims in relation to the Davyhurst Gold Project refurbishment contract entered into by GR Engineering and EGS on 22 September 2016.
In a decision of the Supreme Court of Western Australia delivered on 24 January 2018, GR Engineering and EGS were referred to arbitration for the resolution of the disputes between them. In referring the matter to arbitration, the Court also found that it was "not necessary ... to consider Eastern Goldfields' submission that GR Engineering's proceedings are not proceedings to enforce payments due under the Contract".
A partial stay of GR Engineering's claims was ordered, with claims remaining on foot in the Supreme Court, including against Investmet Limited (Investmet), a company associated with EGS' Executive Chairman, Michael Fotios, whereby GR Engineering claim that Investmet is in default under a deed of partial accord and satisfaction to guarantee EGS' payment of $5.0 million to GR Engineering. In failing to have these proceedings stayed and referred to arbitration, Investmet's application was dismissed and Investmet was ordered to pay GR Engineering's costs.
GR Engineering intends to continue pursuing the full amount of its claims, both in the Supreme Court and via arbitration.
ASX announcement: 25/01/2018