AAK Initiates Arbitration against Enzymotec About Joint Venture Company
19 May 2014 --- Global specialty oil producer AarhusKarlshamn (AAK), has initiated an arbitration at the International Court of Arbitration (ICC), against bio-active lipid ingredient manufacturer Enzymotec. The dispute concerns matters under the Shareholders’ Agreement regarding the joint venture company, Advanced Lipids. The two companies originally entered into this agreement on 14 June 2007.
In a statement, Fredrik Nilsson, CFO of the Swedish AAK Group, said: “We are generally very restrictive with taking legal actions and we would not normally comment publicly on a legal dispute unless formally obliged to do so. In this case we feel it is called upon due to the fact that Enzymotec has released information regarding the dispute. It has been and remains AAK’s preference to amicably reach a settlement with Enzymotec. As our attempts to do so have proven unsuccessful; AAK has referred the matter to arbitration.”
AAK’s request for arbitration concerns Enzymotec’s disclosure of information, which AAK believes was an intentional, material breach of the original joint venture. It has been reported that AAK believes Advanced Lipids is exposed to likely damages in the future as a result of the level of disclosure that has been made about it.
Nilsson continued: “The relevant joint venture business represents only a minor part of the AAK Group as a whole, but the questions in dispute are in themselves of a fundamental character to the joint venture and thus important to resolve. We have with the assistance of legal counsel carefully reviewed our position and believe that our request is well-founded. The partners of the joint venture are in agreement that it will be business as usual during the arbitration process and that the dispute shall mean no disturbance for the customers; the strong customer focus will continue.”
Enzymotec is reported to be of the belief that the claims made by AAK are “without merit” and it intends to vigorously defend its position.
Under the joint venture agreement, pending such a dispute, the parties are both required to continue to conduct the operations of the joint venture in accordance with the agreement.
AarhusKarlshamn (AAK) is one of the world’s leading producers of high value-added speciality vegetable oils and fats solutions. AAK has production facilities in Denmark, Mexico, the Netherlands, Sweden, Great Britain, Uruguay and the US AAK has also toll manufacturing operations in Russia and Malaysia. The company is organized in three Business Areas; Food Ingredients, Chocolate and Confectionery Fats and Technical Products & Feed.
Enzymotec develops and manufactures nutritional ingredients and medical foods. It has two business segments, Pharma and Nutrition, which helps to leverage its lipid-related expertise.
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