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The contractor incurred a loss of $15 million due to defective products from Krynica Vitamin

2021-11-26 22:04

2021-11-26 22:04

The contractor suffered at least $15 million in damages due to Krynica Vitamin’s delivery of defective products in the form of leaking aluminum cans and shredded cartons, the maker of energy drinks, soft drinks and coffee drinks said.

The counterparty’s attorney has declared its willingness to settle the dispute through less formal consultations and negotiations with the Company, which are conducted in good faith and in order to reach an agreement without entering into a formal dispute and formal mediation, and then a dispute before arbitration, within 90 days from the date of receipt of the letter.

The letter regarding this matter was sent to Krynica Vitamin on October 9, and the company has decided to keep this information confidential until the publication of its third quarter report.

A listed company questions counterparty claims in principle and even amount.

Krynica Vitamin notes that the contractor did not justify the estimated $15 million in damage. The Company assumes that its presentation of the value of deliveries made to the contractor and the terms of the contract justify the assumption that the contractor’s declaration of a claim for this amount was a negotiating procedure.

The contract is concluded on the basis of the EXW Incoterms 2020 formula, which means that the company is obliged to produce the products specified in the contract and deliver them to the contractor for collection at the time and place specified in the contract, that is, in this case at the production plant in Dziadkowskie-Folwark. From the moment the products are loaded into the containers, the contractor avoids all risks of loss or damage. The Contractor is solely responsible for the shipping of products and other logistics within US territory. The contractor did not report any defects in the products upon receipt.

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Krynica Vitamin has hired two law firms with an independent expert in aluminum mining and corrosion to investigate potential causes of leakage of packaging (aluminum cans) and responsibility for these phenomena. He also sent an employee to immediately confirm the damage, estimate its extent and investigate the possible causes and responsibilities of the company.

“The actions taken by the company have not yet confirmed the legality of the claims of the counterparty contained in the letter of October 9, 2021. However, they indicate that the counterparty has suffered some damage, the cause of which, and in particular the exact size, is impossible to estimate at the moment” – It was written in the letter.

Krynica Vitamin has notified the packaging (aluminum cans) suppliers of potential defects in the complaint procedure. (PAP Biznes)

Public relations /

Source:PAP Biznes