The initiation of arbitration proceedings against a subsidiary of the Issuer.

Current report no : 2/2013
Report date : 1/7/2013
Abbreviated name : Ciech SA
Subject : The initiation of arbitration proceedings against a subsidiary of the Issuer.
Legal basis : Art. 56 section 1.1 of the Polish Act on Public Offering, the Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies – current and periodic information  

Report : 

The management board of Ciech S.A. (the “Issuer”), acting pursuant to (i) § 5 section 1.8 of the Polish Regulation of the Minister of Finance dated 19 February 2009 on the current and periodic information to be published by issuers of securities and the conditions for recognising as equivalent information the disclosure of which is required under the laws of a non-member state and (ii) Article 906 in connection with Article 907 of the Rules and Regulations of the Luxembourg Stock Exchange, hereby announces that on 7 January 2013 it became aware of the initiation of arbitration proceedings against its subsidiary, Zakłady Chemiczne Zachem S.A., with its registered seat in Bydgoszcz (“Zachem”), based on the information received from Zachem following its receipt of service of process from the International Chamber of Commerce (ICC).  According to a copy of the writ delivered to Zachem:

  1. Air Products Chemical Europe B.V. and Air Products, LLC (“Air Products”) filed a statement of claim against Zachem in the course of arbitration seeking payment of USD 98.61 million and additional compensation in an amount not defined in the statement of claim (the “Statement of Claim”).
  2. The claimants based their claim on Zachem’s allegedly unjustified and unlawful termination of an amine (TDA) supply contract concluded between Air Products and Zachem (the “Contract”), which was referred to by the Issuer in its current report No. 63/2007 dated 19 October 2007 and No. 4/2010 dated 9 February 2010. The Issuer announced the service of the notice of termination and the termination of the Contract in its current report No. 40/2012 dated 12 October 2012 and No. 68/2012 dated 14 December 2012.

The Issuer considers the Statement of Claim to be unfounded. In the Issuer’s opinion, Air Products is not entitled to pursue a claim for payment against Zachem, because, based on the information available to the Issuer, Zachem effectively served a notice of termination of the Contract and the Contract was terminated in accordance with the terms thereof. The only reason known to the Issuer as to why Zachem served a notice of termination of the Contract was because Air Products had breached the Contract and that it is Zachem that is entitled to pursue claims for compensation against Air Products in connection with the breach of the Contract by Air Products.

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

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