AMSC Seeks USD 1.2 Billion from Sinovel at China’s Supreme People’s Court

AMSC, a global solutions provider serving wind and grid leaders, today announced it has filed an appeal with China’s Supreme People’s Court.

AMSC’s appeal relates to the Hainan Higher Court’s decision on April 5, 2012 to uphold the Hainan Province No. 1 Intermediate People’s Court’s dismissal of AMSC’s civil case against Sinovel Wind Group Co., Ltd. (Sinovel) and Dalian Guotong Electric Co., Ltd. (Guotong). This is the smallest of four legal actions that AMSC has brought against Sinovel. In total, AMSC is seeking to recover from Sinovel more than $1.2 billion for contracted shipments and damages in these cases, which stem from Sinovel’s contractual breaches and AMSC’s discovery of intellectual property theft by Sinovel employees.

In September 2011, AMSC filed a copyright infringement lawsuit with the Hainan Province No. 1 Intermediate People’s Court against Sinovel and Guotong. AMSC’s case is supported by a significant amount of evidence demonstrating that its copyrighted software is being infringed. AMSC is seeking a cease and desist order as well as damages totaling approximately US$200,000, making this the smallest of AMSC’s legal actions against Sinovel.

Sinovel filed a jurisdiction opposition motion in December 2011 requesting that the Hainan Province No. 1 Intermediate People’s Court dismiss AMSC’s case against Sinovel, saying the case should be governed by the Beijing Arbitration Commission pursuant to the terms of component contracts between AMSC and Sinovel. Not only did the court grant Sinovel’s motion, it dismissed the cases against both Sinovel and Guotong. AMSC appealed the dismissal to the Hainan Higher Court, which on April 5, 2012 upheld the decision of the Hainan Province No. 1 Intermediate People’s Court.

The rationale for AMSC’s appeal to the Supreme People’s Court includes the following:

• Pursuant to AMSC’s contracts with Sinovel, AMSC has turned to the Beijing Arbitration Commission to resolve its contractual disputes. However, AMSC’s Hainan case is purely a copyright infringement dispute rather than a contractual matter. As such, it is independent of the contracts and belongs within the civil court system.

• In November 2011, Sinovel filed a motion on identical grounds to dismiss a separate copyright infringement case from the Beijing No. 1 Intermediate People’s Court, saying the matter should be governed by the Beijing Arbitration Commission. As previously reported, on February 14, 2012, the Beijing court properly denied Sinovel’s motion to dismiss the case. The Beijing No.1 Intermediate Court stated the software copyright infringement dispute between AMSC and Sinovel is not a dispute “arising from, or in connection with the execution of the contract” and should not be sent to an arbitration institution. Therefore, the jurisdiction opposition raised by Sinovel lacks factual and legal basis and is inadmissible.

• Sinovel’s December 2011 opposition motion requested that AMSC’s case against Sinovel be dismissed by the Hainan Province No. 1 Intermediate People’s Court. Guotong, however, never filed a jurisdictional opposition motion of its own. Despite this fact, the Hainan court dismissed AMSC’s case against both Sinovel and Guotong. Indeed, as there is no contractual relationship between AMSC and Guotong, it is impossible to solve the dispute between AMSC and Guotong through arbitration. Moreover, as Sinovel and Guotong are codefendants, it is impossible to separate them so that they would be governed by a court and arbitration commission, respectively.

 “We applaud the Beijing No. 1 Intermediate People’s Court’s decision and are disappointed that the Hainan courts have made inconsistent and, we strongly believe, improper rulings,” said AMSC Vice President and General Counsel John Powell. “While this case means little to us from a monetary perspective, we will continue to seek justice through the Chinese courts on this matter of global importance.”

[mappress]

Offshore WIND staff, April 10, 2012; Image: amsc