While a surprise to few within PV, Germany’s largest PV module producer SolarWorld could be hit by a damages claim for $793.5 million. The damages as a result of legal action taken against SolarWorld by Hemlock regarding long-term polysilicon supply contracts.
The figure stems from outstanding payments totaling $585 million, plus 12% annual interest. As has been previously observed, such a damages ruling would far exceed the financial reserves SolarWorld has at its disposal.
Reuters notes that the damages would approach SolarWorld’s annual sales of 763 million ($839 million) and total more than three times its cash reserves of 183 million ($201 million).
On July 14, presiding Judge Thomas L. Ludington granted a motion for summary judgment in the case, dismissing SolarWorld’s arguments that it should be heard by a jury. The damages stem from polysilicon take-or-pay supply contracts signed by Hemlock and SolarWorld subsidiary SolarWorld Industries Sachsen GmbH (formerly Deutsche Solar GmbH) towards the end of the last decade when polysilicon supply was tight and prices high.
In his decision granting the summary judgment, Justice Ludington set out how Hemlock representatives had sought to have SolarWorld intervene in antidumping proceedings between the U.S. and China. SolarWorld did not petition the U.S. Department of Commerce in the manner requested of it by Hemlock, bringing to an end negotiations between the two companies that could have resulted in a renegotiation of the long-term polysilicon supply contracts.
SolarWorld is set to appeal any negative ruling in the case. SolarWorld CEO Frank Asbeck has indicated that damages cannot be sought against the SolarWorld parent company in Germany, due to European competition laws.