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CITIC LIMITED
Notes to the Consolidated Financial Statements
For the six months ended 30 June 2016
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31 Contingent liabilities and commitments
(continued)
(e) Outstanding litigation and disputes
(continued)
(iii) CITIC Resources Holdings Limited (“CITIC Resources”) Litigation
(continued)
Service of Claim A was effected on CACT in September 2015 by way of a public notice issued
by the Shanxi Court. Court hearings have been held subsequently. So far, no judgment has
been issued by the Shanxi Court in respect of Claim A.
CITIC Resources has noted from an announcement issued by Shanxi Coal Int’l in August
2014 that, in connection with Claim A, Shanxi Coal I/E had obtained an asset protection
order over a certain quantity of CACT’s alumina and copper stored in bonded warehouses
at Qingdao port.
As at 30 June 2016 and the date of approval of the Accounts, CACT remains of the view
that Claim A is without merit. Accordingly, no provision was made in respect of Claim A.
(2) In the second half of 2015, CACT received an arbitration request notice from the
International Court of Arbitration of the International Chamber of Commerce (the “ICC”) in
respect of an arbitration application by Shanxi Coal I/E pursuant to which, Shanxi Coal I/E
is (i) alleging that CACT has entered into two contracts for the supply of, and has failed to
deliver, copper cathodes to Shanxi Coal I/E (the “Contracts”); and (ii) claiming the amount
of US$27,890,000 (HK$217,542,000) as the aggregate purchase price Shanxi Coal I/E alleges
it has paid to CACT under the Contracts, plus interest (“Claim B”).
As at 30 June 2016 and the date of approval of the Accounts, CACT considers Claim B to
be baseless and the purported submission to arbitration by the ICC wrongful. CACT has
not entered into the Contracts as alleged by Shanxi Coal I/E. Accordingly, no provision was
made in respect of Claim B.
(3) In August 2014, CITIC Resources has noted from an announcement issued by Qingdao Port
International Co., Ltd. (the “Qingdao Port Announcement”) that a legal complaint dated 14
July 2014 (the “Legal Proceedings”) had been issued by ABN AMRO Bank N.V., Singapore
Branch (“ABN AMRO”) against CACT. According to the Qingdao Port Announcement,
among other things, ABN AMRO had issued the Legal Proceedings alleging that CACT had
taken wrongful preservative measures in respect of cargo over which ABN AMRO claims
it had been granted a pledge (the “Subject Cargo”) and is seeking an order that (i) CACT
compensate ABN AMRO for loss of RMB1,000,000 (HK$1,167,000); (ii) CACT withdraw its
asset protection order over the Subject Cargo; and (iii) CACT bear all fees and legal costs of
the Legal Proceedings.
Up to the date of approval of the Accounts, CACT has not been served with the Legal
Proceedings and is, therefore, unable to consider or comment on the substance of
the Legal Proceedings. Accordingly, no provision was made in respect of the Legal
Proceedings.
(iv) There are some issues in dispute with MCC, and their details are disclosed in
Note 3(a).