"The Hainan court’s dismissal of our smallest case is not altogether unexpected, and we are appealing the ruling. We continue to have confidence in all of our cases and expect that our legal actions will yield a positive outcome," AMSC President and Chief Executive Officer Daniel P. McGahn.
Sinovel was AMSC’s largest client. According to AMSC, Sinovel accounted for 67 percent, 70 percent and 68 percent of AMSC’ s sales in 2008, 2009 and 2010, respectively.
As of March 2011, Sinovel refused to accept a component shipment from AMSC, saying they did not conform with the contracts and also China’s grid-access requirements.
AMSC then filed for arbitration and lodged three civil lawsuits to Chinese courts against Sinovel,alleging the illegal use of its intellectual property by its major customer and also asking the customer to accept and pay for all contracted products.
In total, AMSC is seeking to recover more than 1.2 billion U.S. dollars for contracted shipments and damages from Sinovel.
According to McGahn, the copyright infringement complaint filed in October 2011 with the Hainan No. 1 intermediate people’s court against Sinovel is the smallest of the civil cases. AMSC is seeking a compensation of 200,000 U.S. dollars in this case.
In September 2011, Sinovel filed a counterclaim to Beijing Arbitration Commission requesting the arbitration tribunal reject all the arbitration claims made by AMSC and order AMSC to compensate Sinovel 1.2 billion yuan (191 million U.S. dollars) for economic losses from breach of contract.