Dow Chemical awarded $2.48 billion in court battle with Kuwaiti company
Legal proceedings that have been going on for years between Dow Chemical Co. and Kuwaiti state-owned Petrochemical Industries Co. are finally over, after the International Court of Arbitration of the International Chamber of Commerce awarded an extra $318 million to the American chemical corporation.
The dispute started when the K-Dow joint venture, reportedly worth $17.4 billion, was scrapped in December 2008 following widespread criticism in Kuwait that the venture was a waste of public funds and after lawmakers threatened to question the prime minister in parliament if it was launched. In response to external pressure, Kuwaiti officials told Dow Chemical that the Persian Gulf country was backing off the deal, under which the state-owned petroleum company had to pay Dow Chemical $7.5 billion for a 50 percent stake in several chemical plants.
Dow Chemical had intended to use the money from the joint venture to help finance its $15.3 billion purchase of Rohm & Haas Company, a manufacturer of coatings and electronic materials. Because of the deal being scrapped, Dow Chemical started legal proceedings against the Kuwaiti company. Dow was awarded $2.16 billion in May 2012 but a further $318 million has now been added to that sum. The additional award from the International Court of Arbitration of the International Chamber of Commerce brings the total amount Dow Chemical has been awarded to $2.48 billion and is the last step in the arbitration process, bringing it to an end. The award cannot be appealed and is subject to continuing interest until Dow Chemical receives the payment, according to Fox Business.
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Andrew N. Liveris, Dow's chairman and chief executive officer, commented that the sum awarded to the company will allow it to speed up its priority projects by providing valuable cash to the company. Dow and Kuwait share a history of strong partnership and this Court of Arbitration ruling brings a closure to the proceedings. Dow expects that Petrochemical Industries will pay out the award "in a timely manner," he added in a statement. No further details concerning the pay-out have been revealed.
Meanwhile, Dow Chemical has been involved in another court battle in Kansas. The company disputes a $400 million antitrust jury verdict, arguing that there was no evidence to show that it had planned to unlawfully fix urethane product prices. Under U.S. antitrust law the verdict is subject to tripling to $1.2 billion. Dow Chemical strongly denies the allegations, claiming that it was merely following its own business reasons when determining prices, the Detroit News reported.