According to the latest reports, Australia's Griffin Coal and Perdaman Chemicals have settled a massive A$ 3.5 billion lawsuit between them.

Perdaman had sued Griffin Coal, which is a unit of India's Lanco Infratech, for allegedly breach of a coal supply agreement between the two firms. Lanco will pay A$ 7.5 million plus legal costs to Perdaman under the settlement agreement but has not agreed to the allegations in the suit. Perdaman had filed the lawsuit against Lanco in 2011 in the Supreme Court of Western Australia claiming a compensation of A$ 3.5 billion for allegedly breaching a coal supply agreement.

Lanco had described the claims in the lawsuit as baseless. Perdamanis now holding discussions with Chinese coal producer Yanzhou Coal Mining to supply coal for its urea project. Perdaman has indicated that it was concerned about the commercial viability of pursuing a legal case against Lanco.

“Perdaman has maintained its concerns as to Griffin and Lanco's solvency and the commercial value of pursuing its legal case,” the company said in a statement.

Nagaprasad Kandimalla, head of business development at Lanco has brushed aside the concerns about companies' finances. Lanco will be able to focus on the expansion of its Collie mine in Australia now that it does not have to worry about the lawsuit.