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Mining billionaire Clive Palmer is seeking $300 billion in damages from the Australian government over an iron ore project in Western Australia, sparking a furious response from WA Premier Mark McGowan.
Key points:
- The dispute concerns a damages claim from the Balmoral South project
- The notice of arbitration proposes the matter be heard in Switzerland
- The federal government says the legal action will be vigorously defended
Mr Palmer's Singaporean company Zeph Investments has served a notice of arbitration on the federal government, with the intention that the matter be heard in Switzerland.
Former federal and WA attorney-general Christian Porter is one of the lawyers working for Zeph Investments.
Mr McGowan described Mr Palmer in WA Parliament as "treacherous", and the "greediest man in Australian history".
Answering a question in the Legislative Assembly, Mr McGowan read from a prepared statement.
"Today we have seen the most deplorable act of greed in Australian history," Mr McGowan said,
"One of the richest people in Australia, Clive Palmer, now wants more money. And he's suing his country to get it."
The action has been flagged for some time, and follows Zeph's attempts to engage the Morrison and Albanese governments in consultations and negotiations.
The dispute centres on the WA government's 2020 legislation to remove Mr Palmer's ability to extract damages from the state regarding the Balmoral South Iron Ore Project in the Pilbara.
The project had been subject to arbitration for several years, with decisions going against the WA government before the legislation was introduced with retrospective effect.
Mr Palmer's subsequent legal challenges to the WA legislation failed.
Government to defend claim
Federal Attorney-General Mark Dreyfus said the latest legal action would be "vigorously" defended.
"The Commonwealth will work with Western Australia to ensure Australia's interests are protected," he said in a statement.
"As these matters have now become the subject of an investor-state claim, it would not be appropriate to provide further comment at this time."
The federal member for Perth, Assistant Minister to the Prime Minister Patrick Gorman, said WA residents had been through this before.
"No one wants to see another Clive Palmer lawsuit," he said.
"And no Australian wants to see $300 billion of taxpayers' money handed over to Clive Palmer in this absolutely ridiculous lawsuit.
"I think many would be disappointed that we have a former Liberal Party Attorney General helping out on this case, and so far we have absolute silence from Peter Dutton."
Mr Gorman said Mr Palmer was using international trade agreements as a basis to try to sue the Australian government.
"The Commonwealth will outline all of our defence through that process," he said.
"But I think most Australians today would be disappointed that we have to use taxpayer money and legal resources to defend these nuisance lawsuits from Mr Palmer — nuisance lawsuits that, records show, he often loses.
"Mr Palmer used Western Australia as his testing ground for a range of his legal cases, and now he's coming after the Commonwealth.
"He has a former Liberal Party Attorney General, a former West Australian member of parliament, a former West Australian treasurer indeed, as his lawyer in this case.
"These lawsuits have to be taken seriously, because there's huge amounts of taxpayer money at stake, but no-one has forced Mr Palmer to take this action."
'Greediest man in history'
Mr McGowan broke down the $300 billion claim to about $11,500 for every person in Australia, labelling it "pure greed".
"Clive Palmer is the greediest man in Australian history," he said.
"This is a man who once proclaimed he loved Australia, but he now claims to be a Singaporean businessman — I kid you not — a Singaporean businessman, in order to sue Australia.
"It is treacherous and traitorous conduct on a scale this country has never seen before."
Mr McGowan pledged to support the Commonwealth in fighting the claim.
"He wants to rip $300 billion from Australian schools, hospitals, aged care and housing from Medicare and the NDIS, from every Australian," the premier added.
"Mr Palmer has now cemented himself in Australian history as the most appalling and selfish person our country has ever seen."
Palmer touts new WA newspaper
Included in Mr Palmer's, list of claims is one for $US10 billion for "moral damages".
Under international law, moral damages (referred to in the Lusitania case of 1923) can encompass pain and suffering to an individual, hurt feelings, humiliation, or loss of social position, or injury to reputation.
Mr Palmer has issued a statement, saying "if any windfall was to come to Mineralogy, the funds would be used for public good."
He said he would spend the money on "neglected WA hospitals under the McGowan government" .
"There is also a compelling case for a new independent daily newspaper in WA which doesn't rely on cartoons to sell copies," he said.
Mr Palmer said "serious questions" needed to be asked about the "lack of media diversity and the consumer's choice for accurate news".
The federal government is likely to respond to Zeph's notice of arbitration within 30 days.
Palmer could win: expert
Zeph is contending that the Commonwealth of Australia has breached obligations established under the ASEAN-Australia New Zealand Free Trade Area.
UNSW international law expert Jonathan Bonnitcha said $300 billion was the largest claim that has been made in international arbitration under a free trade or investment agreement.
But Dr Bonnitcha said the strategy wasn't new.
"It's not unprecedented for Clive Palmer, who's essentially Australian, to use a foreign-owned entity to engage a system which was designed for the protection of foreign investments," he said.
"So this, kind of, 'round tripping' aspect of the claim is not unprecedented, though it is unusual."
Dr Bonnitcha said he expected Zeph would argue the WA amending act extinguished its rights.
"These international arbitration tribunals have looked pretty sceptically at retroactive measures that interfere with legal proceedings that are on foot or that have already been decided.
"For Palmer's team, they're going to be seeking to emphasise the unusual nature of the West Australian legislation that singles out Palmer and Mineralogy with retroactive effect."
But he said it was difficult to assess the chances of success.
"Every arbitration tribunal is constituted differently so they're different individuals involved and there's a certain element of randomness in the outcome.
"Zeph does have some chance at success here, a realistic chance of success on the claim.
"[But] The amounts that they're claiming are completely unrealistic, the biggest award of compensation in one of these arbitrations ever is $50 billion and that related to the nationalisation of the Yukos Oil company in Russia."
The arbitration tribunal would be made up of appointees from Zeph, the Commonwealth government, and a third that the parties agree on.
It would have a mandate to make a binding decision on whether Australia breached minimum standards for protection of foreign investment.