LDK Solar Co., Ltd. (“LDK Solar”; NYSE: LDK), a manufacturer of solar wafers and PV products, announced the filing of an objection for an Arbitration before the China International Economic and Trade Arbitration Commission (CIETAC) in Shanghai, China against Canadian Solar, Inc. (CSI), a provider of solar system solutions. LDK Solar also filed a lawsuit to demand compensation from CSI due to the breach of a take-or-pay supply agreement signed by the two companies and the illegal termination of the agreement.
LDK Solar signed the 10-year supply agreement with CSI in 2008. Under the contract, there are comprehensive and precise provisions regarding the price and delivery amounts for the duration of the contract. CSI failed to perform its purchase obligations and ceased making payments. LDK Solar believes the 10-year contract is legal and remains effective, and that CSI's unilateral action constitutes a breach of the contract.