Project Sea Dragon - Case Update

The liquidators of the collapsed Project Sea Dragon, an almost $2 billion Northern Territory prawn farm owned by Seafarms Group, have recommended that the project be placed back into administration after receiving a further DOCA proposal from Seafarms Group.

We last wrote about this matter in November, when Robert Hutson and David Johnstone of KordaMentha were appointed joint liquidators of Project Sea Dragon after the Federal Court dismissed an appeal of a decision terminating the company’s DOCA. The Court upheld the primary judge’s decision that the DOCA was an abuse of Pt 5.3A, having been used to allow Project Sea Dragon to avoid its liability to Canstruct, a contractor that managed works on the prawn farm. Project Sea Dragon had been ordered to pay $14 million to Canstruct by an adjudicator shortly before it initially entered voluntary administration in February 2023.

The dismissal of the appeal and appointment of liquidators looked to be the end of the story, but now the liquidators are recommending that the project be placed back into administration. In a recent update to the market, Seafarms Group announced that it was continuing to invest in the development of Project Sea Dragon and that a number of key potential investors were continuing to seek involvement in the project “subject to a resolution of the liquidation matter”.

The announcement also states that the liquidators were seeking court approval to appoint themselves as administrators, with a hearing scheduled for 4 March. The decision does not appear to have been released at this time.