Answer to the statement of claim and counterclaims of the subsidiary of the Issuer in arbitration proceedings

Current report no : 13/2013
Report date : 3/16/2013
Abbreviated name : Ciech SA
Subject : Answer to the statement of claim and counterclaims of the subsidiary of the Issuer in arbitration proceedings
Legal basis : Art. 56 section 1 point 2 and section 5 of the Polish Act on Public Offering – actualization of the current information

Report : 

The Management Board of Ciech S.A. (“Issuer”), with reference to the current report no 2/2013 of January 7, 2013 on the initiation of arbitration proceedings by Air Products Chemical Europe B.V. and Air Products, LLC (“Air Products”) against the subsidiary of the Issuer, Zakłady Chemiczne Zachem S.A. with its registered seat in Bydgoszcz (“Zachem”), informs that it learned about the fact that on March 15, 2013 counsels for Zachem filed the answer of Zachem to the statement of claim of Air Products and counterclaims of Zachem against Air Products to the International Chamber of Commerce (ICC).

In the answer to the statement of claim and counterclaims Zachem objected to the arguments of Air Products on the alleged breach of the amine supply contract (“Contract”) by Zachem. The factual and legal reasoning that the claims of Air Products are groundless, while the compensatory claims and demands of Zachem based on the evident breach of the Contract by Air Products should be accepted was presented and supported with evidence. Zachem demands in particular:

• declaration that Air Products has breached the Contract, on the termination of which the Issuer informed in the current reports no 40/2012 of October 12, 2012 and no 68/2012 of December 14, 2012, by:
• failing to provide adequate assurances on continuation of performing the Contract,
• ceasing to manufacture amine,
• assigning the amine manufacturing obligations to Bayer without the consent of Zachem,
• failing to uphold the confidentiality requirements in the Contract,
• failing to supply amine that complied with technical specifications;
• declaration that Air Products has acted with gross negligence, willful misconduct, and/or bad faith;
• ordering Air Products to pay Zachem damages, in an amount to be determined under the rules of arbitration in the further phase of the proceedings, to which Zachem is entitled as a result of its loss incurred primarily due to the necessity of laying off over 600 employees and paying appropriate severance pay, the necessity of disassembling facilities and cleaning up the areas, and also the necessity to pay other specified costs;
• declaration that Zachem has not breached the Contract;
• declaration that Air Products is not entitled to any damages from Zachem.

In the opinion of the Issuer, the claims made by Zachem should be accepted. Because Zachem rightfully terminated the Contract due to an obvious breach thereof by Air Products, Zachem can pursue compensatory claims and the position presented by Air Products does not find its basis in facts and law.

Signatures of the Company’s Representatives : Dariusz Krawczyk – President of the Management Board 

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