The legal proceedings started on December 27 in Singapore’s High Court.

In a recent statement to the market, White said it was seeking damages for breach of a joint venture deed between the Kaltim Supacoal (KSC) shareholders.

White owns 51% of KSC while Bayan owns 49% and had agreed to pioneer White’s briquetting technology at the Tabang coal plant.

The dispute started in November after Bayan requested that White purchase Bayan’s share of KSC for $US45 million.

At the time White dismissed this request informing Bayan it was in breach of its obligations under the JV agreement.

This prompted discussions between senior representatives of the two companies regarding the future of the project and the joint venture agreement.

Following the discussions, White Energy said no resolution on the project had been identified and the companies were unable to reach an agreement on commercial terms relating to the ongoing supply of coal by Bayan to KSC.

The decision to pursue legal action against Bayan comes as no surprise after White’s managing director Brian Flannery said it would seek “legal and other commercial options” following Bayan’s actions.

White has requested that Bayan continue to supply run of mine coal from the Tabang mine to KSC up until June 2012.

Bayan wanted out of the JV project at Tabang after it announced on November 10 the expenditure on upgrading the project was higher than expected and would not deliver sufficient returns.