A Chinese state-owned enterprise has called a halt on Clive Palmer's bid to terminate the Chinese state-owned enterprise's rights to mine his iron ore in Western Australia - for now.
The federal MP's private company Mineralogy had served a termination notice on CITIC Pacific, giving it 21 days' notice that it would no longer be allowed to mine the ore at the massive $8 billion Sino Iron project in the Pilbara.
Mineralogy said its decision followed governance and market disclosure concerns.
But CITIC hit back on Friday when it successfully sought an interim injunction in the WA Supreme Court.
Mineralogy's notice was issued on September 12, after CITIC allegedly failed to address matters raised in a default notice dating back to July 2012.
"We say we answered at the time," CITIC's lawyer Charles Scerri told the court on Friday.
Mineralogy had previously undertaken in court to not issue or rely on default and termination notices, before going on to issue 30 notices.
It withdrew 20, but reserved the right to reissue them, Mr Scerri said.
"We didn't actually commit the breaches they allege," he said.
And even if the default notices were valid, there would still be the issue of whether they should lead to termination, Mr Scerri said.
He said the fact some of the notices were withdrawn illustrated that they had been issued in bad faith.
Mineralogy's lawyer Andrew Panna told the court it was a serious commercial dispute and argued his client should not be told to stop exercising its rights.
But Justice James Edelman said it was a grave concern that Mineralogy had issued notices to CITIC just days after giving an undertaking not to do so.
"The spirit of those undertakings were not abided by," he said.
Justice Edelman granted an interim injunction restraining Mr Palmer's company "from issuing or purporting to terminate or suspend" its mining agreement with CITIC, "whether in reliance on any past or future notice or otherwise".
The interim injunction is in place until December 18 when an interlocutory injunction hearing will be held.
If an interlocutory injunction is granted, no default or termination notices can be issued until the parties go to trial next year over their main dispute regarding royalty payments.
CITIC's paid $US415 million ($A449 million) to Mineralogy to acquire the rights to the Sino Iron project, and argues it's paid all royalties owed.
But Mineralogy director Clive Mensink said on Friday the company may lodge a complaint with regulators in Hong Kong, where the Chinese entity is listed, regarding the alleged disclosure breaches cited by Mineralogy.
Mr Palmer is already embroiled in a legal battle with CITIC, which is seeking compensation over $12 million it claims was inappropriately used by Mineralogy.
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