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Tue 29 May 2012 12:04 PM

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Kuwait forms panel to probe Dow ruling - cabinet

Gulf state wants to investigate US$2.16bn ruling against K-Dow joint venture

Kuwait forms panel to probe Dow ruling - cabinet
The committee, headed by the finance minister, will also seek to “minimise losses and damages”.

Kuwait formed a ministerial committee to handle an international court ruling that ordered the Gulf state to pay US$2.16bn in damages to Dow Chemical, according to a cabinet statement.

The committee, headed by the finance minister, will also seek to “minimise losses and damages” as a result of the ruling, according to the statement, released after the Council of Ministers’ weekly meeting yesterday.

The award by the London-based International Court of Arbitration doesn’t include costs or interest and is final and binding, Midland, Michigan-based Dow said on May 24.

Kuwait’s Petrochemical Industries Company, under pressure from lawmakers, canceled a contract to form a 50-50 venture with Dow’s plastics unit in December 2008. The failure of the so-called K-Dow venture deprived Dow of a US$9bn payment during the global financial crisis, almost derailed its 2009 purchase of Rohm & Haas and forced the company’s first dividend cut.

Kuwait’s government, which has held a series of high-level meetings since the ruling was announced, also formed a separate panel to probe all procedures followed in the deal and those leading to its cancellation, according to the statement.