Setback for Canadian Solar in legal wrangle

Chinese solar manufacturer and project developer Canadian Solar this morning announced its apparent victory in an ongoing dispute with wafer manufacturer LDK Solar has hit a snag.

The Jiangsu Suzhou Intermediate Court had handed Canadian Solar a legal victory in May when it threw out a request by debt-crippled LDK to enforce an arbitration ruling which had awarded the Jiangxi-based manufacturer RMB248.9 million (US$41 million) against Canadian Solar over wafer supply contracts LDK says the solar developer breached.

But the intermediate court today overruled its decision at the request of the Jiangsu Provincial High Court which heard entreaties from LDK and agreed the case should be re-adjudicated.

The dispute relates to wafer supply contracts entered into by the two companies, in October 2007 and June 2008, and which were subsequently terminated.

LDK is seeking compensation for the cancelled contracts and secured the award of the RMB248.9 million after a decision by the former China International Economic and Trade Arbitration Commission.

Enforcing the award is proving difficult for LDK, however, and a press release from Canadian Solar announcing today’s developments stated the company, which has most of its manufacturing operations in China but is headquartered in Guelph, Ontario and registered in the Cayman Islands tax haven, said: "will continue to vigorously contest the merits of the arbitration award."