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(upstreamonline) -- An
international arbitration panel has ruled that Dow Chemical Co., the largest
U.S. chemical maker by sales, is to be awarded USD2.16 billion in damages after
a Kuwait company canceled a 2008 agreement to buy a stake in the company’s
plastics business.
Midland, Mich.-based Dow put together a USD17.4 billion joint venture with
Petrochemical Industries Co. (PIC), a subsidiary of state-owned Kuwait Petroleum
Corp., to produce plastics for consumer products, automotive parts, and drug
processing in 2008.
But as commodity prices plunged and the global economy went into a recession,
the so-called K-Dow Petrochemicals joint venture was scrapped just days before
it was set to close. Two months after the deal collapsed, Dow posted losses of
USD1.55 billion for the fourth-quarter of 2008 and cut about 11 per cent of its
global work force.
The International Court of Arbitration in Paris ruled that PIC will pay Dow
for backing out of the deal. The court is part of the International Chamber of
Commerce.
“This outcome brings resolution and closure to the issue,” Dow chairman and
CEO Andrew Liveris said in a news release. "We remain focused on continuing to
move forward with our transformation and profitable business partnerships — both
in Kuwait and around the world." |
