Republic of Moldova’s Legal Proceeding against Intercomsoft Dismissed
August 09 2010 - 9:15AM
Business Wire
Trimol Group, Inc. (OTCBB: TMOL) announced today that a pending
arbitration proceeding in the Republic of Moldova which was
initiated by the Government of Moldova against Intercomsoft Ltd.
(“Intercomsoft”), the Company’s wholly owned subsidiary, has been
dismissed, without prejudice.
The proceeding in Moldova entitled “Ministry of Economics of the
Republic of Moldova, Ministry of Internal Affairs of the Republic
of Moldova, Ministry of Information Development of the Republic of
Moldova and State Enterprise “REGISTRU” of the Republic of Moldova
vs Intercomsoft, Ltd.” involved substantially the same claims which
are the subject of a pending lawsuit initiated by Intercomsoft in
Switzerland against the Government of Moldova (the “Swiss Legal
Proceeding”) for numerous breaches of the Contract on Leasing
Equipment and Licensing Technology awarded to Intercomsoft in April
1996 by the Government of the Republic of Moldova (the “Supply
Agreement”). Pursuant to the Supply Agreement, Intercomsoft
provided the Government of Moldova with all of the equipment,
technology, software, materials and consumables necessary for the
production of all national passports, drivers’ licenses, vehicle
permits, identification cards and other government authorized
identification documents during the ten year term of the
contract.
In the Swiss Legal Proceeding, the Swiss court accepted
jurisdiction of Intercomsoft’s lawsuit which seeks damages against
the Government of Moldova in the amount of $41 million, plus
interest, on the basis of various alleged breaches of the Supply
Agreement. In connection with this proceeding, the Swiss court also
granted Intercomsoft’s request to establish an ad hoc arbitration
panel to hear the merits of Intercomsoft’s claims against Moldova.
The Government of Moldova failed to appear in such action and is
currently in default with respect to its rights to appoint one of
the three members of the ad hoc arbitration panel established by
the Swiss court. Two of the members of the arbitration panel have
been appointed and the appointment of the third member is expected
shortly.
“The Company will continue to vigorously pursue its substantial
claims against the Government of Moldova, which, without
justification or explanation, failed to comply with a number of its
contractual obligations to Intercomsoft,” stated Jack Braverman,
Chief Financial Officer of Trimol. “It is surprising and
disconcerting that a foreign government of an emerging country such
as Moldova would send a message to investors and the international
financial community that they will not honor their contractual
commitments,” continued Mr. Braverman.
As a dedicated long-standing and reliable supplier to Moldova,
Intercomsoft invested substantial sums in Moldova to establish,
install, maintain and operate the equipment and provide all of the
materials and consumables used to produce Moldova’s passports,
national identification cards, drivers’ licenses, and other
essential government documents. The Government of Moldova continues
to operate such equipment in contravention of its contractual
obligations. “We are surprised that the Government of Moldova would
so brazenly dishonor its payment obligations under a government
contract while continuing to use proprietary technology and
equipment of a corporate vendor in blatant disregard of its
contractual obligations,” stated Mr. Braverman.
Additional information with respect to this matter is available
in the Company’s Report on Form 8-K filed with the Securities and
Exchange Commission on July 27, 2010.
Forward Looking
Statements
This press release contains forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected.
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