Last week, the Beijing Arbitration Commission opened a court session to hear the contractual arbitration between Sinovel and AMSC.
The court did not come to a verdict but Sinovel vice-president Tao Gang said: "The core of the arbitration lies in whether the goods supplied by AMSC had quality problems and whether they met the standards stipulated in the contracts. So far, we have commanded core evidences showing the goods do not meet the contractual standards."
Tao did not elaborate on his comment.
In response, AMSC vice president for marketing Jason Fredette said: "We are pushing forward with our arbitration and civil cases in China as we seek fair compensation for the contracts that our former customer has broken and the intellectual property they have stolen.
"Arbitration proceedings are now underway, and we expect our copyright and trade secret cases to be heard later this year. We have gotten assurances from the Chinese government that this will be a fair process, and we continue to expect that the actions we are taking will lead to a favorable outcome for our company."
According to Huang Zongping, an attorney of Beijing Qianyuan law firm, since the arbitration case involves large-sum compensations and multiple litigations relating to many contracts and projects, the trial will be complex. It is impossible to hear all the complaints in one court session.
Huang said that such arbitration case would normally last for several months, excluding the time needed for appraisals.
This is the second case put under trial in a series of legal actions AMSC has taken against Sinovel concerning intellectual property infringement.
In early February, south China’s Hainan first intermediate people’s court ruled to reject a lawsuit of AMSC against Sinovel over infringement of computer software copyright.
AMSC President and CEO Daniel McGahn responded at the time, saying that his company was appealing the ruling, and it continued to have confidence in all of its cases and expect that its legal actions would yield a positive outcome.
Sinovel was AMSC's largest client. Sinovel accounted for 68% of AMSC's sales in 2010. As of March 2011, Sinovel refused to accept a component shipment from AMSC. It said the components did not conform to the contract and also fell short of China's grid-access requirements.
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