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Commercial Arbitration & Suits Proceeding in AMSC v Sinovel

Tuesday, January, 10, 2012

The multiple case dispute between American Superconductor Corporation (AMSC) and Sinovel Wind Group Inc., Ltd. has begun with a commercial arbitration over Sinovel's breach of contract in front of the Beijing Arbitration Commission. The breach of contract arbitration is valued at $770 million dollars--$70 million for non-delivered product shipments and the remaining $700 million is divided among other breaches of contract. The total value of all the cases is estimated at more than $1.2 billion.


The Civil Cases and Criminal Charges


AMSC is also charging Sinovel with three civil cases of intellectual property infringement, copyright infringement and is urging Beijing police to take action on criminal charges against specific Sinovel employees. These are all related to acts of corporate espionage exchanging trade secrets involving one former AMSC employee and high ranking employees at Sinovel. The cases of corporate espionage involve the exchange and implementation of AMSC-specific upgrades to wind turbines on the part of Sinovel. AMSC is asking for a total of $456 million and cease and desist orders. One of the claims is for $450 million, and represents the largest intellectual property claim that the Beijing Arbitration Commission has faced to date.


Evidence and Existing Impact of this Commercial Dispute


The evidence includes a confession by the former employee of AMSC, hundreds of emails between him and executives at Sinovel which include the proprietary intellectual property, contracts between him and Sinovel promising an excess of $1.5 million, and evidence that the intellectual property was put to use in Sinovel's wind farms in China. This published evidence against Sinovel is as solid as a proverbial “smoking gun” and has already cost Sinovel dearly. Already, Sinovel has lost a significant amount of business over this commercial dispute. Mainstream Renewable Power of Ireland backed out of a $1 billion arrangement with Sinovel for a wind turbine system. A commercial arbitration loss on their part could spell doom for the company.