Mining entrepreneur Joe Gutnick and his company Legend International Holdings face a $US40.4 million ($56 million) bill, plus interest, after a Victorian court upheld a ruling in Singapore that found the Melbourne businessman had made "fraudulent misrepresentations" in a deal with India's largest fertiliser collective.
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Mr Gutnick is personally on the hook for $US28.05 million of the $US40.4 million total award by the Supreme Court of Victoria in favour of Indian Farmers Fertiliser Cooperative (IFFCO) and its subsidiary Kisan International Trading.
Legend International is to pay the remaining amount of the judgment in favour of IFFCO. Interest is expected to add millions more to Mr Gutnick and Legend International's final bill.
Lawyers for Mr Gutnick are expected to seek a stay of the orders after the judgment which will put a significant dent in the fortune of the former BRW Rich List member.
IFFCO and Kisan, which had $6.9 billion in revenue last year, had asked the Supreme Court of Victoria to enforce a final award issued in Singapore on May 7 by the Singapore International Arbitration Centre after Mr Gutnick and Legend International refused to pay the money awarded to the fertiliser group.
The Singapore ruling found Mr Gutnick and Legend International Holdings had "induced, by fraudulent misrepresentation, certain purchases of shares in Legend International Holdings," according to court documents.
The dispute is linked to Mr Gutnick's desire to create a fertiliser group to rival Incitec Pivot seven years ago.
In 2008, to much fanfare, Mr Gutnick and his business partners announced a $103 million deal to supply Queensland phosphate to IFFCO for its Paradeep plant.
Under the deal, IFFCO was to invest the $103 million over two years through shares and options in Legend International.
However, the partnership soon turned sour and IFFCO and Kisan filed action against Mr Gutnick and Legend International for the return of the money they had handed over for the shares and the options.
Lawyers for Mr Gutnick and Legend International had argued the Singapore ruling meant IFFCO and Kisan would receive "double payment" by getting their money back while also being allowed to keep the shares in Legend International.
Mr Gutnick's lawyers also told the court it may have been the case the arbitrators had issued the alleged double payment because "they wished to punish Mr Gutnick, given the trenchant criticism and the lack of probative reasoning for the conclusions of fraud".
However, Judge Clyde Croft found that while "double payment" was contrary to public policy, lawyers for Mr Gutnick and Legend International had failed to prove IFFCO and Kisan would receive double payment.
"The award does not allow for double recovery and therefore enforcement would not be contrary to public policy. The applicants' application to enforce the foreign award is therefore successful," Justice Croft said.
Mr Gutnick made his fortune and earned his nickname "Diamond Joe" through his extensive investments in diamond and gold projects that created such personal wealth he graced the pages of the BRW Rich List for many years, the last time in 2014 when his wealth was estimated at $255 million.
Mr Gutnick said after taking advice from his lawyers he would appeal the decision. He declined to comment further.
