According to Sinovel the payment is for 200 turbine components that failed to meet contractual obligations. in addition, other expenses are for the storage and delivery, and related legal expenses and bank loans.
Sinovel has left the equipment unopened in one of its warehouses. Sinovel has requested the arbitration tribunal to rule Sinovel is able return them to AMSC.
Since 26 May 2008, Sinovel signed eight purchasing contracts with AMSC to buy the latter’s wind-turbine electronic control core components, software and spare parts.
Sinovel said that the AMSC delivered goods do not have the low voltage ride through capacity, which do not conform to the quality standard stipulated in the contracts. Thus, AMSC violated the contracts.
In March 2011, Sinovel refused to accept a component shipment from AMSC, stating they did not conform to the contracts and also China’s grid-access requirements.
In September, AMSC filed for arbitration against Sinovel on eight disputed contracts. In December, Sinovel filed a counterclaim to Beijing Arbitration Commission, requesting the arbitration tribunal to reject all the arbitration claims made by AMSC and order AMSC to compensate Sinovel $191 million for economic losses from breach of contract.