Two coal companies are set to become locked in a high-stakes case worth tens of millions of dollars over a West Coast coal mine.
The High Court has ruled that Australian listed Bathurst Resources Ltd (BRL) must pay $US40 million ($NZ60m) to the mine's former owners, L&M Coal Holdings.
L&M claimed Bathurst owed the money because certain certain volumes of coal, specified in the sale agreement, had been produced and shipped.
Bathurst has said it will appeal the judgement.
It bought the Escarpment mine in 2010 but production was delayed until 2014 and then ceased in 2016 because of the depressed international market.
In that time Bathurst was said by the court to have shipped more than 25,000 tonnes and was therefore bound to pay. Bathurst said because it never exported any coal it did not have to pay.
"Naturally, BRL is extremely disappointed by the High Court's judgement. After considering the reasons given in the judgement and taking legal advice, it has resolved to appeal the High Court's decision to the Court of Appeal," Bathurst chairman Toko Kapea said in a statement.
The case has turned on issues such as the definition of shipped, whether Bathurst's failure to pay was legally actionable, and whether the original agreement was a sale with payment in instalments.
L&M said it had tried to reach an amicable settlement outside of court, but would now press on to make Bathurst fully comply with a number of other outstanding contractual obligations in connection with the permits for mining on the Denniston Plateau, which it sold to Bathurst eight years ago.
"L&M Coal Holdings will oppose any appeal and invites BRL to focus constructively on taking active steps to commence exploiting the valuable coal resources on the Denniston Plateau from which LMCH is entitled to be paid royalties."
Bathurst picked up some of Solid Energy's assets in a joint venture with food group Talleys.