Clive Palmer loses high court battle with WA over law blocking mine compensation bid

Clive Palmer has lost his high court battle with Western Australian over a law banning him from seeking billions of dollars in compensation.

On Wednesday the high court unanimously ruled WA’s extraordinary law extinguishing Palmer and his company Mineralogy’s right to seek compensation over an iron ore mine in the Pilbara was “not invalid or inoperative in its entirety”.

While the decision means the mining billionaire cannot seek compensation from the WA government, it could shift Palmer’s focus to the federal government given Palmer has previously signalled he could launch an investor-state claim.

Mineralogy is in dispute with WA over the stalled Balmoral South iron ore project rejected by the then-premier Colin Barnett in 2012.

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When Palmer sought arbitration of the dispute in the Queensland supreme court the WA parliament rushed through legislation to extinguish his claim, warning it could cost the state up to $30bn.

Mineralogy and Palmer both launched high court challenges, arguing that the WA law purported to exercise judicial power and had infringed common law rights.

Palmer, who represented himself, described the legislation as unconstitutional, “repugnant to justice” and “an abomination masquerading as a law”.

He argued against it on several fronts, including that it discriminated against him as a Queensland resident.

On Wednesday, in a joint judgment, the high court justices said the WA law “plainly” does not single Palmer out for discrimination on the basis he was a resident of another state.

“Neither the legal operation nor the practical operation of the whole or any part of the Amending Act would be any different if the plaintiff were resident in Western Australia instead of being resident in Queensland,” they said.

The justices found that Palmer had sought to treat the term “rule of law” as if it were in the constitution, attribute a particular meaning to it based on material outside the constitution and “then to invalidate a law for inconsistency with the meaning or content so attributed”.

The high court also rejected Mineralogy’s separate challenge, unanimously upholding the validity of the law’s most controversial sections, including those specifying that Mineralogy’s proposals for Balmoral South did not give a right to compensationunder the agreement and that a 20 May 2014 arbitral award in the company’s favour “is of no effect”.

In a joint judgment chief justice Susan Kiefel, and justices Stephen Gageler, Patrick Keane, Michelle Gordon, Simon Steward, and Jacqueline Gleeson found the company had provided “no basis” to convince the court it was necessary to rule on the validity of the rest of the act.

The justices said Mineralogy’s case raised “possibilities” that the WA law would disadvantage it in separate federal court and Queensland supreme court cases but “they remain nothing more than possibilities”.

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They warned the parties had paid “insufficient attention” to demonstrating the necessity of answering the questions of law raised and held that altering parties’ rights doesn’t interfere with judicial power, even if the changes are harsh.

The court ordered Palmer and Mineralogy to pay costs.

In December, federal budget papers revealed that taxpayers could ultimately be on the hook for compensation due to a “prospective investor-state claim against Australia” arising from a free trade agreement with Singapore because Mineralogy is owned by Mineralogy International, registered in Singapore.

The mid-year economic and fiscal update said the commonwealth has “received requests for consultation in relation to a dispute pertaining to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA)”.

While it does not set out the terms of the legal letter to the commonwealth, the papers note consultations “are a pre-condition to the formal commencement of investor-state dispute settlement proceedings”.

Guardian Australia contacted Palmer and Mineralogy for comment.