Financial Daily from THE HINDU group of publications
Friday, Jun 17, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 17, 2005 |
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Corporate
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Corporate Disputes F.L. Smidth accuses L&T of breach of pact Our Bureau
Chennai , June 16 F.L. SMIDTH Ltd, a leading supplier of cement production technology, has accused Larsen & Toubro Ltd of violating a licencing agreement the two companies had till recently. In a release, F.L. Smidth said it has informed L&T that it will "take all actions which it deems necessary and fit to protect its rights and to prevent L&T from continuous and deliberate breach of its contractual obligations as well as continuing and deliberate infringement of F.L. Smidth's know-how and proprietary rights." Up to 2004, F.L. Smidth's presence in the domestic market was partly based on a licencing agreement and co-operation with L&T and partly based on its own business through Fuller India Ltd. However, the release said from November 2004, F.L. Smidth terminated its licencing agreement with L&T. According to the agreement, L&T had accepted not to use F.L. Smidth's know-how and proprietary rights and to refrain from competition with F.L. Smidth for five years. It said that L&T issued a release earlier this month that it had obtained an order for a cement grinding unit plant on a turnkey basis in Oman. "L&T is, therefore, in breach of its contractual obligations towards F.L. Smidth in tendering for the project in Oman despite L&T's repeated written confirmation towards F.L. Smidth that the company will honour its surviving obligations under the licensing agreement," the release said. F.L. Smidth said it had reason to believe that L&T's quotation for the Oman project was based on the company's know-how and technology, which L&T obtained access to only for the purpose of the licensing agreement. When contacted, L&T officials in Mumbai said that the company "has not breached any agreement or understanding which they had with F.L. Smidth."
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