Enzymotec Announces Positive Outcome in ICC Arbitration Award
03 February 2016 - 12:30AM
Arbitration tribunal rejects AAK’s requests for
declaratory relief in their entirety
Enzymotec Ltd. (NASDAQ:ENZY) (“Company” or "Enzymotec"), a
developer, manufacturer and marketer of innovative bio-active
lipid-based nutritional ingredients and medical foods, announced
today that the Company received a positive outcome in the
arbitration award relating to the arbitration proceedings held
under the auspices of the International Chamber of Commerce (“ICC”)
in Amsterdam, the Netherlands.
As the Company previously disclosed in May 2014,
AarhusKarlshamn AB (“AAK”), a Sweden-based, global producer of
specialty oils, submitted a request for arbitration against the
Company seeking certain declaratory relief with respect to the
joint venture agreement relating to Advanced Lipids AB (“AL”),
which it jointly owns with Enzymotec. AAK alleged that the
Company's disclosures in connection with its initial public
offering constituted an intentional and material breach of the
non-disclosure obligations contained in the joint venture
agreement. AAK also sought a declaration that following notice of
termination provided by one party, if neither party provides the
other party with a timely buy-sell notice then the joint venture
will terminate regardless of whether a buy-sell procedure was
effected. Enzymotec filed counterclaims against AAK with respect to
certain disputed operational issues and AAK’s conduct during the
Company's initial public offering.
In its decision, the ICC tribunal rejected, in
their entirety, AAK's requests for declaratory relief in connection
with alleged breaches by the Company of the joint venture
agreement's non-disclosure obligations. Additionally, the ICC
agreed with Enzymotec's position and found that the joint venture
agreement should be interpreted such that the only exit the parties
have from the agreement is via a buy-sell process which must end in
one party buying out the other and not, as AAK had claimed, simply
through the expiration of the joint venture agreement. With
respect to Enzymotec's counterclaims, the tribunal denied all
relief requested by the Company.
Dr. Ariel Katz, Chief Executive Officer of
Enzymotec, commented: "We are very pleased with the outcome of the
arbitration. Hopefully, as a result of the ruling, AAK and
Enzymotec can now put this dispute behind them and jointly focus on
building more value in AL."
About Enzymotec Ltd.
Enzymotec is a leading global supplier of
specialty lipid-based products and solutions. The Company develops,
manufactures, and markets innovative bio-active lipid based
nutritional ingredients and medical foods, driven by a deep core of
cutting-edge, proprietary technologies intended to improve people’s
health. For more information, visit www.enzymotec.com.
Forward Looking Statements
This release may contain forward-looking
statements, which express the current beliefs and expectations of
Company management. Such statements involve a number of known and
unknown risks and uncertainties that could cause our future
results, performance or achievements to differ significantly from
the results, performance or achievements expressed or implied by
such forward-looking statements. Important factors that could cause
or contribute to such differences include the following risks: A
high proportion of the sales of the InFat product is sold to end
users in China and to a single company; Growth in the Chinese
economy has moderated and this slowdown and related volatility
could adversely impact demand in China for our products; The demand
for products based on Omega-3 and in particular, premium products,
such as krill oil, has declined and may continue to decline
following a significant increase in manufacturing capacity by
manufacturers of these products, resulting in intense competition
and price pressure; Our offering of products as "medical foods" in
the United States may be challenged by regulatory authorities; We
rely on our Swedish joint venture partner to manufacture InFat and
certain matters related to the joint venture are the subject of
disagreement in an arbitration proceeding; We are subject to a
degree of customer concentration and our customers do not enter
into long-term purchase commitments with us; We depend on third
parties to obtain raw materials, in particular krill, necessary for
the production of our products; We are dependent on a single
facility that houses the majority of our operations; We may have to
pay royalties with respect to sales of our krill oil products in
the United States or Australia and any infringement of intellectual
property of others could also require us to pay royalties;
Potential future acquisitions of companies or technologies may
distract our management, may disrupt our business and may not yield
the returns expected; We anticipate that the markets in which we
participate will become more competitive and we may be unable to
compete effectively; We may not be able to successfully expand our
production or processing capabilities; Our ability to obtain krill
may be affected by conservation regulation or initiatives; Our
product development cycle is lengthy and uncertain, and our
development or commercialization efforts for our products may be
unsuccessful; and other factors discussed under the heading "Risk
Factors" in the Company's Form 20-F filed with the Securities and
Exchange Commission on March 2, 2015. Forward-looking statements in
this release are made pursuant to the safe harbor provisions
contained in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are made only as of the date
hereof, and the Company undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact:
The Ruth Group
Tram Bui / Lee Roth
Phone: 646-536-7035 / 7012
tbui@theruthgroup.com
lroth@theruthgroup.com
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