German PV giant SolarWorld AG said Thursday that it would appeal a ruling in favor of Hemlock Semiconductor Corp. in its $770 million legal dispute with the silicon producer.
A U.S. court in Michigan on Wednesday granted a motion for summary judgment in the case, meaning that the judge, rather than a jury, will decide the case. While a ruling against SolarWorld appears likely, the PV group cautioned: “This ruling is no final judgment in this case, but means that the court will decide on the claims made by Hemlock on its own, i. e. without involving a jury. A date on which such judgement will be announced has not yet been set by the court.”
The dispute stems from a deal between Hemlock and SolarWorld subsidiary SolarWorld Industries Sachsen GmbH (formerly Deutsche Solar GmbH) that went south after silicon prices plummeted. The SolarWorld unit sought to renegotiate long-term silicon contracts with the Hemlock to no avail. Hemlock is seeking $585 million on the basis of a “take or pay” obligation and in damages, plus interest of $171 million.
SolarWorld, which currently has a net debt of €217 million ($241 million), warned investors last month that if ultimately enforced, a ruling in favor of Hemlock “would have a considerable negative impact on the company’s liquid funds, possibly even threatening the continued existence of the company as a going concern.”
Nevertheless, SolarWorld argues that the supply contracts are in violation of European antitrust law, “which could mean that the purchasing obligations are null and void.” The company adds that from its perspective, “the supplier is therefore not entitled to claim damages.”
The company reiterated Thursday that inspite of Wednesday’s ruling, it “continues to assume that Hemlock will not be able to actually enforce any claims in Germany” due to the antitrust concerns under European law.” SolarWorld added that it remained “optimistic” that such enforcement would fail to be concluded successfully in Germany as European trust law was a fundamental principle of the German legal system.
In addition, as German financial daily Handelsblatt reports, SolarWorld CEO Frank Asbeck told investors last month at the company’s general meeting that even in the case of a legal defeat, Hemlock would not be able to confiscate SolarWorld assets because its subsidiary held no assets in the U.S.