Siemens 2011 Annual Report Download - page 324

6 A. To our shareholders 51 C. Combined management’s discussion and analysis 23 B. Corporate Governance
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June  asserting material claims against certain other par-
ties to the project. While no claims are being asserted against
Siemens in the arbitration at this time, it is possible that such
claims against Siemens may follow as matters progress.
As previously reported, OSRAM is party to a number of patent
lawsuits involving Samsung group companies and LG group
companies. On the one hand, OSRAM has sued Samsung
group companies and / or LG group companies in the U.S.,
South Korea, Germany, China and Japan for patent infringe-
ments, and is requesting injunctions against unauthorized
use of the asserted patents and, in some cases, import bans
and compensation. In addition, OSRAM has commenced pat-
ent invalidation lawsuits relating to LG patents and Samsung
patents on Light Emitting Diode (LED) technology in South
Korea and relating to LG patents on LED technology in China.
Samsung group companies and / or LG group companies have,
on the other hand, initiated patent invalidation lawsuits relat-
ing to OSRAM patents on LED technology, in particular white
LEDs, in South Korea, Germany, China and Japan. In addition,
Samsung group companies and / or LG group companies have
filed patent infringement lawsuits in various jurisdictions,
such as the U.S., South Korea and China, requesting injunc-
tions against unauthorized use of the asserted patents and, in
some cases, import bans and compensation from OSRAM.
The patent infringement lawsuits initiated by LG group com-
panies partly involve direct and indirect customers of OSRAM.
OSRAM is defending itself in these lawsuits.
In July , Mr. Abolfath Mahvi filed a request for arbitration
with the ICC seeking an award of damages against Siemens
AG in the amount of DM million (or the equivalent in euro,
which is approximately € million) plus interest. Mr. Mahvi’s
claim is based on a contract concluded in  between a
company that was then a subsidiary of Siemens and two oth-
er companies, one domiciled in the Bermudas and the other
in Liberia. Mr. Mahvi alleged that he is the successor in inter-
est to the Bermudan and Liberian companies and that the
companies assisted Siemens AG in the acquisition of a power
plant project in Bushehr, Iran. On August , , the arbitra-
tion award was served upon Siemens AG. All claims of Mr.
Mahvi were rejected. The plaintiff must bear the costs of the
arbitration proceeding.
In July , Hellenic Telecommunications Organization S.A.
(OTE) filed a lawsuit against Siemens AG with the district
court of Munich, Germany, seeking to compel Siemens AG to
disclose the outcome of its internal investigations with re-
spect to OTE. OTE seeks to obtain information with respect to
allegations of undue influence and / or acts of bribery in con-
nection with contracts concluded between Siemens AG and
OTE from  to . In May , OTE was granted access
to the public prosecutor’s files in Greece. At the end of July
, OTE expanded its claim and requested payment of dam-
ages by Siemens AG of at least €. million to OTE for al-
leged bribery payments to OTE-employees. Siemens AG is de-
fending itself against the expanded claim.
As previously reported, Siemens A.E. entered into a subcon-
tract agreement with Science Applications International Cor-
poration, Delaware, USA, (SAIC) in May of  to deliver and
install a significant portion of a security surveillance system
(the CI project) in advance of the Olympic Games in Athens,
Greece. Siemens A.E. fulfilled its obligations pursuant to the
subcontract agreement. Nonetheless, the Greek government
claimed errors related to the CI-System and withheld amounts
for abatement in a double-digit million € range. Furthermore,
the Greek government withheld final payment in a double-
digit million € range, claiming that the system had not been
finally accepted. Although Siemens A.E. is not a contractual
party of the Greek government, under Siemens A.E.’s subcon-
tract agreement with SAIC non-payment by the Greek govern-
ment also has an economic effect on Siemens A.E. SAIC has
filed for arbitration contesting all the Greek government’s
claims and its ability to withhold payments. The Greek State
filed, inter alia, a motion to stay the arbitration in view of the
ongoing criminal investigations conducted by the Greek pub-
lic prosecutor. This motion was denied by the Arbitral Tribu-
nal in July . Resolution of this dispute has been complicat-
ed by public bribery and fraud allegations against Siemens
A.E. in Greece, which have resulted in extensive negative me-
dia coverage concerning the CI system.
As previously reported, in December , the Polish Agency
of Internal Security (AWB) remanded into custody an employ-
ee of Siemens Healthcare Poland, in connection with an in-
vestigation regarding a public tender issued by the hospital of
Wroclaw in . According to the AWB, the Siemens employ-
ee and the deputy hospital director were accused of having
manipulated the tender procedure. In October , the inves-
tigation was closed.
Russian authorities are conducting widespread investigations
regarding possible fraudulent activities of resellers and gov-
ernmental officials relating to procurement of medical equip-
ment in the public sector. As is the case with other providers
of medical equipment, OOO Siemens Russia has received nu-