Sapphire ingot maker Tera Xtal Technology has disclosed the American Arbitration Association (AAA) has decided that US-based equipment supplier GT Advanced Technologies (GTAT) should return payment Tera Xtal made in 2012 for sapphire crystal growing furnaces which failed to work, plus interest, for a total of US$24.296 million.
Tera Xtal in 2011 placed an order with GTAT for 98 furnaces at a total price of about US$68 million, the company said. The first batch of 30 furnaces were delivered and installed in February 2012, Tera Xtal indicated, adding the performance of the 30 furnaces failed to meet standards specified in the procurement contract.
According to Tera Xtal, it then asked GTAT to solve the problems twice but GTAT did not respond. Tera Xtal finally stopped running the 30 furnaces in October 2012 and, according to the contract, filed with AAA for arbitration asking GTAT return payment already made at the end of 2012.
AAA has ruled that GTAT should return Tera Xtal's payment of US$20.967 million for the 30 furnaces plus interest of US$3.329 million calculated from November 6, 2012 to August 12, 2014 at an annual rate of 9%, Tera Xtal indicated.
