Seafarms' renewed plans to build Project Sea Dragon, one of the world's largest shrimp farms in Northern Australia, has been clouded by a federal court case related to contractor payment.
This was reported by the Australian Broadcasting Corporation (ABC News) about the court dispute between Seafarms with its AUD 2 billion shrimp farming project, and Canstruct, its contractor, which managed the work at the facility, with an estimated production of 100,000 tons. A reality that has become an obstacle for the company and its project.
As the Australian newspaper reported, the Sea Dragon Project entered voluntary administration in February, following an order from the Royal Institution of Chartered Surveyors to pay the contractor AUD 13.9 million worth of unpaid fees.
About a month later, Seafarms announced a measure that would limit the amount it would pay Canstruct. Specifically, about 10% of what it believes it is owed.
Since then, the Federal Court has granted an injunction as it goes along until it can rule on the case.
Thus, next month, as reported by ABC News, Seafarms will face court action following the federal court order to halt the company's distribution of funds.
Initially, Seafarms withdrew the financing, which led to the suspension of payments on the project, an action that called on the contractors. However, they later announced an AUD 3.5 million contribution to pay creditors through a deed of corporate agreement (DOCA).
Despite this, Canstruct initiated court proceedings to terminate the DOCA and appoint a liquidator. During this time, the directors of the Sea Dragon project resigned, and the Federal Court issued an injunction to halt the distribution of the fund until a decision was made on whether or not to terminate the DOCA and what steps to take.
For the time being, as explained by ABC News, The Sea Dragon project plans to defend the proceedings and seek legal advice, although Seafarms refrains from commenting.
The main complaints have already included the public money spent in supporting the company, particularly on surrounding roads. ABC News reported that the federal government provided AUD 63 million for nearby road infrastructure, while the Northern Territory government spent AUD 56 million, and the West Australian government allocated AUD 15 million.
Seafarms aims to develop the world-class Project Sea Dragon, a large-scale marine prawn production system in northern Australia. The project covers around 10,000 hectares and has a target of producing over 100,000 tonnes of prawns annually.
