SolarWorld chances not good in USD-770m dispute with Hemlock - report

The chances of SolarWorld (ETR:SWV) winning the legal dispute with US polysilicon supplier Hemlock Semiconductor next month are very low, the Handelsblatt said today, citing several law experts.

On June 9 a US District Court will announce its ruling.

The German photovoltaics (PV) maker has not made any provisions for an eventual loss in court, the German newspaper noted, even though Hemlock is seeking around USD 770 million (EUR 690.5m) in damages and interest. The US party filed the lawsuit in March 2013 because SolarWorld had stopped polysilicon purchases in 2012 under a long-term supply deal.

Handelsblatt cited SolarWorld lawyers as saying that Hemlock’s demands are too high and that damages amount to no more than USD 392 million.

In its 2015 annual report, the German company said that even in case of a negative ruling in the US, “SolarWorld continues to assess the probability of enforcement of such ruling as low” because it has to comply with the essential principles of the German law. In the report, released in March, the company says it might be able to use in Europe its argument that the polysilicon supply contract with Hemlock was invalid because it breached EU antitrust laws. A judge in Michigan has ruled that SolarWorld cannot rely on that defense in the US.

If US courts ruled that Hemlock Semiconductor is entitled to claim for damages against SolarWorld Industries Sachsen GmbH, and if the decision could be enforced, it would have “a considerable negative impact” on SolarWorld’s liquid funds, “possibly even threatening the continued existence of the company as a going concern”, it said in the annual report.

(USD 1 = EUR 0.897)

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