Andrew Forrest’s lieutenants at Fortescue facing court battle with the billionaire's former right-hand man

Andrew Forrest’s lieutenants at Fortescue are facing a toe-to-toe battle with a former colleague who was once the billionaire’s longest-standing associate. The former Fortescue Future Industries chief financial officer Michael Masterman is set to play a central role in challenging contentious search and seizure orders covertly gained in May by Sydney lawyers working for the Forrest flagship. With the backing of Silicon Valley-based venture capitalist Peter Barrett, Mr Masterman is now chief executive at major Fortescue litigation target Element Zero. Rather than roll over in the Federal Court, Mr Masterman has directly challenged a version of history underpinning raids in May on Element Zero’s factory units in Malaga and the homes of its two founding scientists in May. Allegations against the former Fortescue scientists Bjorn Winther-Jensen and Bart Kolodziejczy are central to a potentially complex intellectual property row over minerals processing technology that produces minimal carbon dioxide. But Mr Masterman’s rich business history dating back to Mr Forrest’s failed Ananconda Nickel and the building of Fortescue is set to be invaluable in a battle where very little is agreed. The only clear thing is that Fortescue’s lawyers hired private investigators who began spying on Element Zero’s Malaga headquarters and the homes and families of its two former scientists around April 24. Documents released by the Federal Court on Friday, almost two months after issuing seizure orders in secret hearings, reveal claims Mr Masterman about negotiations between Fortescue and Element Zero. Mr Masterman says Fortescue supplied samples of its magnetite iron ore to Element Zero pursuant to a deal struck in July last year. And Mr Masterman claimed Element Zero was ready to provide details of its technology after what he described as open and constructive discussions at Fortescue’s offices on January 24 about future commercial opportunities. The newly released Federal Court filings show these claims are hotly disputed by Fortescue. After leaving Fortescue in July 2022, the lawyers claim Mr Masterman kept contact with the company’s minerals technology department and they provided him with iron ore samples for testing from about May 2023. The Fortescue lawyer claimed this supply arrangement continued from May until August when a technical boss raised concerns about the support being given to Mr Masterman. Fortescue’s legal chief Phil McKiver “identified potential intellectual property infringement”. But Mr Masterman assured him there was “nothing to worry about”. Fortescue lawyers claimed it became apparent in August or September last year that “Mr Masterman was collaborating with Dr Kolodziejczyk and Dr Winther-Jensen, and that they had caused Element Zero to be incorporated”. All this was claimed in submissions filed ahead of the May 14 hearing where Fortescue claimed there was an “industrial-scale misuse” of Fortescue’s technology. Element Zero has protested to the court about the quality of Fortescue’s disclosure. Laying the groundwork for the battles ahead, Justice John Logan said Element Zero was alleging a “forensic-scale debacle” when Fortescue obtained the search orders. The court will begin hearing Element Zero’s push to overturn the search and seizure orders on August 18. Legal arguments over confidentiality orders will be heard on August 1. While Element Zero is now seeking only limited confidentiality on filed documents, Fortescue wants a sweeping order to stop the publication of almost 600 pages of reports documenting its spying activities.