Investor Relations
IR Announcement
December 23, 2020
To Whom It May Concern
- Company
- Oki Electric Industry Co., Ltd.
- Representative
- Shinya Kamagami
President
Representative Director - Code
- 6703 (First Section, TSE)
- Contact
- Atsushi Yamauchi
General Manager
Investor Relations - TEL
- +81-3-3501-3836
Notice concerning the award of arbitration proceedings by subsidiary
As disclosed in "Notice concerning arbitration proceedings by subsidiary" dated November 2, 2015, Oki Banking Systems (Shenzhen) Co., Ltd., an OKI subsidiary, filed an arbitration application against its sales partner Shenzhen Yihua Computer Industrial Co., Ltd. to seek payment of outstanding sales receivables, designating Shenzhen Yi Hua as the respondent, and continued the arbitration procedure. On December 16, 2020, the South China International Economic and Trade Arbitration Commission, the Arbitrator, delivered a written award. Details of the judgement are as follows.
1. Background and Outline of the Request for Arbitration
Since December 2012, Oki Banking Systems (Shenzhen) Co., Ltd. (hereinafter, "OBSZ") has sold ATMs in China through Shenzhen Yihua Computer Industrial Co., Ltd. (hereinafter, "Yihua Industrial"). However, since Yihua Industrial has failed to pay to OBSZ due proceeds from sales of OBSZ products without justifiable reason, OBSZ has filed and continued the arbitration procedure to seek payment. On the other hand, Yihua Industrial claims that it incurred losses due to a defect in the provided products and OBSZ did not respond appropriately; a separate arbitration proceeding is under way with OBSZ as the respondent (as of December 18, 2015 "Notice concerning filing of arbitration proceedings against subsidiary"). This time, the judgement was made regarding the claims of OKI and OBSZ.
2. Summary of Arbitral Award
(1) Yihua Industrial to pay OBSZ RMB 1,096,866,800 (approx. JPY17.4 billion) for the unpaid products and overdue interest.
(2) OBSZ pays Yihua Industrial RMB 69,589,750 (approx. JPY1.1 billion) as a deposit for undelivered contracted goods and its overdue interest.
Yihua Industrial pays OBSZ the amount obtained by offsetting (1) and (2).
(3) Yihua Industrial compensates OBSZ for its attorney fees.
*The exchange rate is RMB 1 = JPY15.84 (as of December 16, 2020).
3. Future Outlook
We believe that the award is broadly in line with the arguments of OKI and OBSZ and that the justifications of our claims have been determined. OKI and OBSZ will seek prompt implementation of the award by Yihua Industrial.
We do not expect this outcome to have an immediate impact on our earnings forecasts. However, if any matters that need to be disclosed occur due to future developments, such matter will be promptly disclosed.
