Mentha, in the matter of Arrium Limited (administrators appointed)

In the matter of Arrium Limited, the administrators sought directions and clarifications regarding their functions and powers under the Corporations Act 2001 (Cth). The primary issues before the court involved the administrators’ personal liability for debts incurred in connection with two significant agreements: a contract with CDE Global Limited for the installation and commissioning of low-grade iron ore processing equipment (CDE Contract), and a loan agreement with Export Finance and Insurance Corporation (EFIC Loan). The administrators sought to limit their personal liability concerning these agreements, particularly to exclude liability under the CDE Contract and limit liability under the EFIC Loan to the proceeds from the sale of the OneWhyalla business. Additionally, the administrators requested an extension of the time for registering security interests granted to EFIC under the EFIC Loan to prevent automatic vesting in the OneWhyalla Mining Entities.

The court considered whether the requested orders were appropriate, given the importance of the CDE Contract and the EFIC Loan to the viability of the OneWhyalla business. The court noted that both counterparties had agreed to modify the administrators’ liability, and that it would be reasonable to limit their personal liability as sought. Regarding the registration of security interests, the court recognised the potential issue under section 588FL of the Act, which could lead to the automatic vesting of a security interest in the OneWhyalla Mining Entities if not registered within the specified timeframe. The court concluded that extending the registration time under section 588FM of the Act was appropriate, provided the failure to register was not prejudicial to creditors or shareholders, and it was just and equitable to grant relief.

The court granted the orders sought by the administrators, clarifying their liability concerning the CDE Contract and the EFIC Loan, and extending the time for registering the security interests. The final orders included specific modifications to the administrators’ liability, fixed registration times for the security interests, and provisions for maintaining the confidentiality of certain documents. The court also directed the administrators to enter into the CDE Contract and the EFIC Loan on specified terms and to file affidavits with the court within seven days of execution. The orders reflected the court's consideration of the administrators' need for protection, the agreement of the relevant parties, and the potential impact on creditors and shareholders.