China Sunergy seeks REC Wafer injunction extension

Chinese solar cell manufacturer China Sunergy (Nasdaq:CSUN) said today it has delivered a petition to a Norwegian district court to extend an existing injunction concerning REC Wafer Norway.

Last month, Nanjing, China-based China Sunergy obtained an injunction—set to expire Oct. 15—against REC Wafer Norway, which prevented it from drawing on certain bank guarantees. China Sunergy is now looking to extend that injunction to an unspecified date.

In addition to the extension, China Sunergy said today it also filed a judicial order to the same court claiming that REC Wafer Norway is not and hasn’t been involved in a contract between China Sunergy and the dissolved company REC SiTech. China Sunergy says REC Wafer Norway consequently isn’t entitled to claim any position according to the terminated contract.

REC SiTech doesn’t exist because it merged with REC ScanWafer, which later changed its name to REC Wafer Norway. China Sunergy has said it wasn’t informed of the merger despite contractual obligations to be notified.

Last month, REC Wafer Norway terminated a supply agreement for monocrystalline silicon ingots and/or wafers entered into between China Sunergy and the dissolved REC SiTech in 2008. REC says "the take-or-pay contract," valued at about NOK 2.4 billion ($426.6 million), covers deliveries of pre-defined volumes at pre-defined prices from 2009-2015.

REC Wafer Norway is seeking $50 million, according to three on-demand bank guarantees to cover its payment obligations. China Sunergy is disputing REC Wafer Norway’s position as the beneficiary of the bank guarantees and its position as a party to the contract.

REC said it has signed several long-term, take-or-pay contracts with a range of customers where the price and volume are typically pre-determined for the entire contract period, and the customer is not allowed to renegotiate terms and conditions.

China Sunergy sells solar cell products to Chinese and overseas module manufacturers and system integrators (see China Sunergy partners with Italian solar manufacture and China Sunergy moves into Australia with 10 MW in sales contracts).

REC Wafer Norway is a division of Sandvika, Norway-based Renewable Energy Corp. (OSLO:REC).

In May, Thalheim, Germany's Q-Cells sold all of its 85 million shares of REC in a €530 million ($705 million) deal (see Q-Cells stock spikes with €530M sale of REC shares).