DFD refused to pay according to ICC Final Award

DFD refused to pay according to ICC Final Award

As DFD has rejected their obligation to make payment according to the ICC Award of 15 May 2013 Chenco is now taking measures at Chinese state courts

 

according to the N.Y. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (PR China is a member state).

 

It has to be clarified that the Chinese court only examines:  

  1. whether the Final Award was made without severe violation of procedural rights
  2. whether the arbitral proceedings were conducted fairly and impartially
  3. whether each party was granted the right to be heard    

DFD had already invoked the Swiss Federal Court to complain about (1) - (3) but has withdrawn its complaint.  

 

The Chinese court is not allowed to question:  

  1. that the Final Award is correct (regarding its content)
  2. that DFD indeed uses Chenco AlF3 technology
  3. that Chenco’s AlF3 technology is indeed functioning well  

Regarding these (1) - (3) issues the Final Award is legally binding and may not be further examined. Thus there is no real 2nd instance or appeal.

 

21.11.2013


 

Chenco won ICC arbitration against Do-Fluoride

Chenco won ICC arbitration against Do-Fluoride (“DFD”), China

1.    The Arbitral Tribunal rendered its Final Award in May 2013 per unanimous decision and concluded that:

  1. DFD is using “Chenco AlF3 fluid bed process”;
  2. Chenco’s AlF3 technology functions well and is in compliance with the contractual stipulations, that is why DFD has built further (at least) four plants;
  3. DFD does not use - as DFD pretended - its “own anhydrous AlF3 process”;

2.    The false defense of DFD of using an “own” technology was rejected.

3.    The Arbitral Tribunal ordered DFD to pay to Chenco:

  1. EUR 100,000.00 per month starting on 23 March 2011, and continue to pay such monthly penalty of EUR 100,000.00 on the 23rd of each following month, as long as DFD uses Chenco AlF3 technology, however, no longer than until 31 August 2016 (23 Mar 2011 – 31 Aug 2016 = 65 months);
  2. further EUR 320.000,00 as damages;
  3. interest amounting to 5 % p. a. on all claims and penalties awarded;
  4. DFD shall not use CHENCO’s technology until all aforesaid penalties are paid;
  5. Costs of the arbitral proceedings are payable at a quote of 15% by DFD and 85% by Chenco;
  6. all payments shall be net of Chinese taxes.

Background

1.    Chenco supplied successful AlF3, AHF and LiPF6 technology.

Chenco provided technology and helped to build the contractual plants. Based on Chenco technology, its customer DFD

  1. has become the world’s leading producer of AlF3 with best quality;
  2. is the biggest AHF producer with best quality in China;
  3. is meanwhile also the biggest producer of high quality LiPF6 in China;
  4. gained roughly 1.0 billion RMB (about EUR 125 Mio.) at the Shenzhen Stock Exchange when going public (IPO 2010).

2.    Copy plants of DFD

In spite of its great Chenco based success DFD has chosen to build numerous AlF3 and AHF copy plants and not to pay the contractually agreed license fees.

Chenco - through its law firm Dr. Stadler & Partner, Leimen/Heidelberg - took resort to the ICC-arbitration clause in the TESA and filed a case in 2011 against DFD at the International Chamber of Commerce (ICC) for payment of AlF3 technology.

3.    Chenco continues arbitration proceedings

DFD did not only copy AlF3 but also AHF technology and does not pay the agreed amounts for LiPF6 technology either.

Therefore and consequently Chenco will continue arbitral proceedings against DFD to enforce its AHF and LiPF6 claims.

 

29.10.2013