The hearing in Potash Corp. of Saskatchewan Inc.’s lawsuit (GM Sept. 27, p. 1) against BHP Billiton is scheduled for Nov. 4. In the meantime, scheduling for expedited discovery in the case was being worked out last week before a federal magistrate, with the latest round expected on Friday, Oct. 1. Much of the wrangling is over which documents would be made available and which executives would be deposed, according to sources close to the case, with indications that BHP CEO Marius Kloppers will likely give a deposition.
“We are pleased that the court has scheduled a hearing on Nov. 4, well in advance of the Nov. 18 scheduled expiration of our offer,” said BHP in a statement. “We are gratified that the court made clear that the Potash Corp. of Saskatchewan Inc. discovery proposals are excessively broad. As we said last week when PotashCorp filed its complaint, we believe the case is without merit and we intend to contest it vigorously, including by filing a motion to dismiss later this week. Today’s ruling did not address the sufficiency of the complaint or the merits of the case.”
A PotashCorp source said the judge is simply leaving the discovery up to the magistrate. As of Thursday morning, Sept. 30, BHP had yet to file a motion to dismiss.
In the meantime, a report commissioned by the province of Saskatchewan is due to be released Oct. 4. The report, by the Conference Board of Canada, an independent, not-for-profit applied research organization, will assess the impact of the BHP purchase of PotashCorp and its impact on jobs and government revenues, among other considerations. Potash royalties are a large portion of the province’s annual revenues. To date, Canadian authorities have been skeptical that the deal would have a “net benefit” to Canada under the Investment Canada Act.
As it currently stands, the regulatory hurdles may be BHP’s largest impediment to implementing the deal. No other bidder has yet to emerge, and the most cited potential bidder – China’s Sinochem – would also draw scrutiny from Canadian regulators.