Siemens 2008 Annual Report Download - page 282

186 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
the annulment and stay of enforcement of the award, alleging serious procedural irregularities. An ad hoc com-
mittee has been appointed to consider Argentina’s application. On June 6, 2008, Argentina led with ICSID an
application for revision and request for stay of enforcement of the award alleging the discovery of new, previ-
ously unknown facts that would have decisively affected the award. Argentina relies on information reported in
the media alleging bribery by Siemens, which it argues makes the BIT inapplicable. The application for revision
was registered by ICSID on June 9, 2008 and forwarded to the original members of the ICSID arbitration tribu-
nal. The application for revision may result in a stay with respect to Argentina’s application for annulment pend-
ing before the ad hoc committee. On September 12, 2008, the arbitral tribunal issued its initial procedural order
requiring that Argentina submit its memorial supporting the application for revision by February 13, 2009. The
tribunal postponed its decision regarding leave to submit a counterclaim until the request has been formulated
and substantiated. No deadline was set.
Pursuant to an agreement dated June 6, 2005, the Company sold its mobile devices business to Qisda Corp.
(formerly named BenQ Corp.), a Taiwanese company. A dispute arose in 2006 between the Company and Qisda
concerning the calculation of the purchase price. From September 2006 onwards, several subsidiaries in differ-
ent countries used by Qisda for purposes of the acquisition of various business assets from the Company led
for insolvency protection and failed to fulll their obligations under various contracts transferred to them by
the Company under the 2005 agreement. On December 8, 2006, the Company initiated arbitration proceedings
against Qisda requesting a declaratory award that certain allegations made by Qisda in relation to the purchase
price calculation are unjustied. The Company further requested an order that Qisda perform its obligations
and/or the obligations of its local subsidiaries assumed in connection with the acquisition or, in the alternative,
that Qisda indemnify the Company for any losses. The Company’s request for arbitration was led with the
International Chamber of Commerce in Paris (ICC). The seat of arbitration is Zurich, Switzerland. In March 2007,
Qisda raised a counterclaim alleging that the Company made misrepresentations in connection with the sale of
the mobile devices business and asserted claims for the adjustment of the purchase price. In November 2007,
the Company expanded its claims that Qisda indemnify the Company in relation to any losses suffered as a
result of Qisda’s failure to perform its obligations and/or the obligations of its locally incorporated subsidiaries.
Qisda amended its counterclaim in March 2008 by (i) changing its request for declaratory relief with regard to
the alleged misrepresentations to a request for substantial damages, and (ii) raising further claims for substan-
tial damages and declaratory relief. The Company has requested that the arbitral tribunal dismiss the counter-
claim.
Siemens AG is member of a supplier consortium consisting of Siemens AG and a further consortium consisting
of Areva NP SAS and its 100 % afliate Areva NP GmbH. The Company holds a 34% share in Areva NP SAS.
The supplier consortium was contracted by Teollisuuden Voima Oyj (TVO) for the nuclear power plant project
“Olkilouto 3” in Finland. The Company’s participation in the project is approximately 27%. The project is
expected to be delayed by a minimum of 30 months for reasons disputed by TVO and the supplier consortium.
TVO and the supplier consortium are attempting to resolve their dispute amicably. However, if they are unsuc-
cessful, the commencement of arbitration proceedings is likely.
In July 2008, Mr. Abolfath Mahvi led a request for arbitration with the ICC seeking an award of damages against
Siemens in the amount of DM 150 million (approximately €77) plus interest. Mr. Mahvi’s claim is based on a con-
tract concluded in 1974 between a then subsidiary of Siemens and two companies, one domiciled in the Bermu-
das and the other in Liberia. Mr. Mahvi alleges that he is the successor in interest to the Bermudan and Liberian
companies and that the companies assisted Siemens with the acquisition of a power plant project in Bushehr,
Iran. Siemens believes Mr. Mahvi’s claim to be without merit, particularly because the contract on which his
claim is based was the subject of a previous ICC arbitration that resulted in the dismissal of the action led
against Siemens.