A multibillion-dollar lawsuit filed by a U.S. company against a group of uranium producers has prompted the government here to threaten to enact new laws that would allow the seizure of American corporate assets in Australia.
Releasing diplomatic documents covering a longstanding argument between the two countries over the issue, the Australian attorney general, Sen. Peter Durack, said that the new laws being prepared would be modeled on British "recovery-back" laws.
The plan follows a refusal by the Carter administration to get involved in an action by the Westinghouse Corp. against an alleged cartel of 29 uranium producers. Westinghouse says the cartel was formed in the early 1970s to control the price of uranium. At the time, Westinghouse was selling nuclear reactors and offering long-term supplies of uranium, at fixed, low prices, as a sales bait.
Westinghouse has filed a $7 billion suit against the 29 companies in the U.S. District Court of Illinois. Four Australian uranium companies involved have refused to testify, and the U.S. government has turned down an Australian government request to intervene.Canberra arged that such disputes should be settled by governments, not by private legal action.
The proposed new laws would allow Australian companies to apply to an Australian court to recover any property lost through confiscatory action overseas.
The Australian companies would be able to take over the property of any U.S. firm in Australia if Westinghouse recovered its damages by confiscating the Australian companies' assets in the United States. Those damages could be as high as $21 billion under the triple damages provisions of American antitrust laws. The four Australian companies control uranium deposits equal to more than one-fifth of all the known uranium reserves in the non-communist world.The firms are Conzinc Riotinto of Australia, Pancontinental Mining, Queensland Mines and Mary Kathleen Uranium.
With the overt support of the Australian government, the four companies have refused to cooperate with the American court.
Sources in Canberra said Australia released the intergovernmental documents at this stage because it was expecting a decision to be handed down shortly in the Illinois case. For political reasons -- Australia's general election is Oct. 18 -- the government here wanted to let Australian businessmen know in advance that it was preparing to take tough action if the Westinghouse case went against the Australian companies.
The documents disclosed that Durack was negotiating with U.S. Attorney General Benjamin Civiletti to draw up a treaty allowing for consultations prior to any similar case in the future. However, Durack gave no indication of whether Washington would agree to any such treaty.
In fact, in one message the State Department said it was "regrettable" that the Australian defendants in the Westinghouse case had failed to appear before the American court.
"Had the Australian defendants elected to defend the suit, it is entirely possible that the concerns of the Australian government would have been adequately resolved through normal judicial process," the State Department said.