The Jiangsu Suzhou Intermediate Court has rejected LDK’s request to enforce a ruling by Chinas International Economic and Trade Arbitration Commission against Canadian Solar awarding that would have awarded LDK CNY 248.9 million ($40.1 million, 31.5 million).
The dispute stems from wafer supply contracts signed by Canadian Solar and LDK in 2007 and 2008. In December, the arbitration commission ruled that the take or pay wafer supply contracts were valid and effective despite the fact that they were subsequently terminated, making Canadian Solar liable for the CNY 248.9 million amount, which included CNY 60 million ($9.8 million, 7.6 million) paid as a deposit, CNY 188.9 million ($31 million, 24 million) in cash to compensate for loss of profitability and CNY 2 million ($325,756, 253,508) to cover arbitration costs.
"We are delighted with the Jiangsu Suzhou Intermediate Court’s decision in our favor," said Canadian Solar Chairman and CEO Shawn Qu. "We believe we have conducted our business properly at all times and we will continue to advocate cooperation rather than confrontation within the solar industry."
As previously reported, the companies signed two 10 year wafer supply agreements between October 2007 and June 2008. Canadian Solar terminated the contracts in April 2010 and in initiated arbitration proceedings the following July to recover an outstanding sum of some $8.8 million in advance payments.
LDK responded by filing a complaint with the arbitration commission as well as a lawsuit demanding compensation from Canadian Solar for breach of contract.