Air Products seeks $98.6m from Poland's Zachem in TDA contract row

19 December 2012 17:08  [Source: ICIS news]

LONDON (ICIS)--US-based Air Products is seeking $98.6m (€74.9m) in compensation from Poland's Zachem following the termination of a contract for supplies of toluene diamine (TDA) feedstock, the Ciech group, the owner of Zachem, said on Wednesday.

The initial compensation claim has been rejected in its entirety by a district court in Bydogoszcz, the town in northern Poland where Zachem is located, but Air Products has lodged a complaint against that decision, Ciech added.

Ciech alleged that the reason for Zachem's October termination of the remaining five years of a seven-year contract worth around $560m was a contractual breach by Air Products, an industrial gases and chemicals corporation, which it did not specify.

Given that breach, it was Ciech that was entitled to seek damages from Air Products, it claimed.

TDA feedstock from Air Products was used by Zachem to manufacture toluene diisocyanate (TDI).

However, Ciech has announced that Zachem is to very soon cease TDI production in line with an assets sale contract with BASF which includes a TDI non-competition clause.

Prior to the cancellation of the contract, Air Products had supplied TDA to Zachem since the early 1990s.

($1 = €0.76)

By: Will Conroy
+44 20 8652 3214

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