The initiation of court proceedings against the Issuer

Current report no : 5/2013
Report date : 1/25/2013
Abbreviated name : Ciech SA
Subject : The initiation of court proceedings against the Issuer
Legal basis : Art. 56 ust.1. pkt 2 Ustawy o ofercie – informacje bieżące i okresowe

Report : 


The management board of Ciech S.A. (the "Issuer"), acting pursuant to §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 equired under the laws of a non-member state, hereby announces that on 25 January 2013 it received from the District Court for Warszawa-Śródmieście a document sent from a Federal District Court for the Eastern District of Pennsylvania (the "USA Court") containing a motion for service the Issuer with a statement of claim (the "Statement of Claim") of Air Products LLC ("Air Products") in a case initiated by Air Products against the Issuer before the USA Court.

The prayer for relief of the Statement of Claim encompasses primarily :

  1. Holding the Issuer liable to Air Products on the claims asserted in 
    the Statement of Claim,
  2. Awarding Air Products damages in an amount to be proven at trial and 
    in excess of USD 75.000 (seventy five thousands dollars),
  3. Awarding Air Products exemplary damages on account of willful and 
    otherwise culpably wrong conduct of the Issuer.

According to a copy of the Statement of Claim serviced to the Issuer, Air Products bases its claims on the assertions as to the alleged fraudulent actions of the Issuer aimed at leading Air Products to price concessions concerning the contract between Air Products with a subsidiary of the Issuer, Zakłady Chemiczne Zachem S.A., with its registered seat in Bydgoszcz ("Zachem") and as to alleged tortious interference in the contractual relationship between Air Products and Zachem. Air Products supposedly incurred damage in the amount of USD 16 million in form of price concessions and damage for lost profit in the amount of not less than USD 98 million.

The Issuer considers the Statement of Claim to be entirely unfounded. In the opinion of the Issuer, Air Products seeks to obtain unjustified benefits relating to the termination of an amine (TDA) supply contract concluded between Air Products and Zachem (the "Contract"), of which the Issuer informed in its current report No. 68/2012. The Contract was effectively terminated by Zachem due to the fault of Air Products and the reason for its termination was, i.a., discontinuation of the delivery of amine (TDA) from a plant in Pasadena and failure to assure on the possibility of continuation of the delivery of amine (TDA) in accordance with the provisions of the Contract, of which the Issuer informed in its current report No. 40/12.

The Issuer did not commit any actions alleged by the Air Products in the Statement of Claim, in particular it did not conduct any illegal actions in terms of facts and business relations, covered by the Statement of Claim.

Notwithstanding the arguments on the lack of substantive grounds, in the reply to the Statement of Claim, the Issuer intends to raise the lack of jurisdiction of the USA Court as to the Issuer in a case not resulting from a contractual or factual relationship of the Issuer with Air Products related to the territory of the United States of America.

The Issuer informed separately about the claims of Air Products against Zachem in the arbitration proceedings in the current report No. 2/2013 dated 7 January 2013 onforming that it considers the statement of claim of Air Products in arbitration to be groundless

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


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