Evonik Degussa GmbH ("Evonik") has filed arbitration proceedings against Gigaset AG ("Gigaset") at the Deutsche Institution für Schiedsgerichtsbarkeit e. V. (German Institution of Arbitration) and demands payment of a penalty of 12 million by Gigaset on the basis of a contract entered into in 2006.
Gigaset has rejected both the allegations and claims made by Evonik and will defend itself against the arbitration proceedings. Gigaset bases its assessment on a report from a reputable law firm. In consultation with the auditors, Gigaset has adequate provision for risk of loss in the 2011 financial statements.
Under an agreement dated 8 September 2006, Gigaset (at the time operating under the name Arques Industries AG) acquired a company called Oxxynova from Evonik. In this agreement and subject to various conditions, Oxxynova undertook to maintain its production site at Lülsdorf. Oxxynova’s undertaking was secured by a penalty, and Gigaset issued a contractual guarantee for this obligation.
Evonik claims, in essence, that the Oxxynova group had violated their undertaking to maintain the company's location Lülsdorf at the end of 2007. As guarantor, Gigaset was liable jointly and serverally (gesamtschuldnerisch) for the penalty.
Gigaset considers the action to be unfounded. In particular, Gigaset is of the opinion that Oxxynova had not breached the contract but was entitled to close the Lülsdorf site. This was expressly permitted by the contract under certain conditions. These conditions were met. Since Oxxynova owed no penalty, it was consequent that there cannot be a claim against Gigaset. Gigaset bases this assessment, inter alia, on a report from a reputable law firm.
Gigaset AG, Munich, is a worldwide operating company in the telecommunication and accessories sector. The company is a leading global producer of cordless phones and Europe’s market leader in DECT phones. Internationally, the premium provider with 1,600 employees is represented in more than 70 countries and is ranked in third place in its sector. The Gigaset AG shares are traded in the TecDAX (Prime Standard) of the Frankfurt Stock Exchange. Symbol: GGS (ISIN: DE0005156004).
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