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The drawn-out dispute between the Timor-Leste government and an Australian energy company has come to an end with the latter’s failure to provide $1.3 million in security for costs.
Citing Lighthouse Corporation’s history of non-compliance despite repeated warnings, the Supreme Court of Victoria has dismissed the Melbourne-based company’s proceedings against the Timor-Leste government over a soured 2010–11 contract.
In doing so, Justice Jim Delany refused to allow Lighthouse an extension to 18 September on its submission there was “a reasonable likelihood” it could make the $1.3 million payment.
In addition to its failure to provide evidence of its financial position, the extension request would have posed a risk to the five-week trial that had been set down for 19 October.
At the time of Justice Delany’s decision, there was just a month to serve the Prime Minister of Timor-Leste and prepare for the 24 lay witnesses and 11 expert witnesses across seven areas.
Timor-Leste also had a small window of time to address “a substantial accumulation of overdue trial preparation steps which have resulted from Lighthouse’s non-compliance”.
“The administration of justice is jeopardised by the Lighthouse proposal because the parties are not able to prepare properly and in an orderly fashion for trial,” Justice Delany said.
Having experienced frequent blackouts in its capital, Dili, Timor-Leste turned to Lighthouse for the urgent supply of fuel and eight generators to meet significant electricity shortages.
Lighthouse said it was forced to commence proceedings for its alleged loss of $523 million when the government failed to provide the requested letters of credit prior to shipment.
On Timor-Leste’s argument, the contract was null and void because Lighthouse allegedly lied about its financial capacity, expertise, and relationships with major oil and gas companies.
Following an unsuccessful attempt to start proceedings in the International Centre for the Settlement of Investment Disputes, Lighthouse turned to the Supreme Court. Timor-Leste failed to challenge the court’s jurisdiction between 2018 and 2022.
In 2022, Timor-Leste produced material that allegedly purported to show Lighthouse had doctored a bank statement to suggest an account with $25,000 actually had over $55 million.
Over the next 18 months, Lighthouse changed law firms three times, which caused “extensive delays” to the litigation.
Timor-Leste first tried to have the proceedings dismissed in 2025 due to Lighthouse’s failure to comply with various orders, but failed when Lighthouse lodged security for costs.
In his decision, Justice Delany noted Lighthouse is in disputes with former solicitors “concerning substantial sums of money”, including $700,000 allegedly owed to the principal of Welner Lawyers, and Merton Lawyers claim for a “significant proportion” of the $1.4 million it holds in its trust account.
In a statement shortly after Justice Delany’s decision, Timor-Leste’s Prime Minister Kay Rala Xanana Gusmao said the government “will never waver when it comes to protecting Timor-Leste’s national interest”.
