Sinovel to pay USD 76m to Huaneng Renewables in product quality case

Chinese firm Huaneng Renewables Corp Ltd (HKG:0958) will receive CNY 470 million (USD 75.7m/EUR 69.2m) in damages from domestic turbine maker Sinovel Wind Group Ltd (SHA:601558) over product quality issues.

Huaneng and twelve of its subsidiaries, including Huaneng Fuxin Wind Power Co Ltd, filed a claim with the Beijing No 1 Intermediate People’s Court in September last year. During a mediation procedure in the court on July 22, the parties entered into a settlement agreement, which ended the quality assurance case.

Huaneng took Sinovel to court after the latter failed to fulfill its obligation to complete product rectification under two separate agreements, which were struck after the plaintiff identified significant quality defects in equipment supplied by the defendant. Huaneng still has to make payments of CNY 1.05 billion for the machines, so the damage fee will be deducted from the remaining contract price.

Also as part of the settlement agreement, Sinovel will also supply CNY 30 million of spare parts to Huaneng Renewables.

If the supplier fails to perform its obligations under the agreement, it will have to refund the final payment under the contracts and pay compensation for all the losses incurred.

(CNY 1.0 = USD 0.161/EUR 0.147)

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