Dow Chemical awarded $2.16bn in K-Dow arbitration

24 May 2012 14:57  [Source: ICIS news]

Dow CEO Andrew LiverisLONDON (ICIS)--Dow Chemical has been awarded $2.16bn (€1.73bn) by a court of arbitration relating to the collapse of its planned K-Dow venture with Kuwait’s PIC, the US chemical major said on Wednesday.

Kuwait ruled in December 2008, at the height of the global financial crisis, that PIC should withdraw from the planned olefins and polyethylene joint venture.

The agreement would have seen substantially all of the Dow-owned,  former Union Carbide polyethylene (PE) business and some of Dow’s cracker capacity put into the new company.

Part of Dow’s “asset light” strategy at the time, the K-Dow venture was due to be established as Dow moved to complete its agreed acquisition of US-based specialty materials maker Rohm and Haas.

“The ICC award holds that PIC was liable, and awards damages to Dow of $2.16bn, not including interest and costs,” Dow said in a statement.

Dow and PIC had agreed to resolve their contractual disputes through the International Chamber of Commerce's (ICC) International Court of Arbitration.

“This outcome brings resolution and closure to the issue,” Dow CEO Andrew Liveris said. "We remain focused on continuing to move forward with our transformation and profitable business partnerships – both in Kuwait and around the world.”

Dow said its partnership with Kuwait remains strong and will continue to benefit both parties. It includes the Kuwait-based ethylene, PE and ethylene glycol joint venture Equate and the ethylene glycol joint venture MEGlobal. Kuwait’s Petrochemical Industries Company (PIC) is a partner in both these ventures.

By: Nigel Davis
+44 20 8652 3214

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