In a final ruling, an arbitration panel said the licence agreement between Accsys and Diamond Wood China must continue and the UK-based company must pay £1.2m in legal costs to Diamond Wood on top of €250,000m damages awarded in a previous finding. Accsys estimates its own legal costs at £600,000.
A spokesman for Accsys said the company’s financial position would remain strong, despite the award.
In a trading update the company said sales of Accoya in the first half of the financial year continued to be strong and revenue was up 38% compared with a year before. A successful fourth Worldwide Accoya wood sales conference last month created strong forward orders.
“Subsequent to paying the award, the company’s financial position will continue to be strong and we remain confident of achieving a cash-flow positive position in the foreseeable future as our sales continue to grow,” an Accsys spokesman said.
Accsys terminated the agreement last year, alleging that Diamond Wood had failed to make progress on building the plants. Diamond Wood responded with a claim for damages of more than €100m.
Diamond Wood will continue to be responsible for all Accoya wood marketing and sales in the licensed territories in the Far East and will resume construction of an Accoya plant in the region.
The original licence granted in 2007 was amended and superseded on several occasions after what Accsys alleged was Diamond Wood’s lack of progress.
