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Suzlon sued for supply agreement breach

- By Charlotte Stubben

Diversified manufacturer Trinity Industries said one of its units filed a lawsuit against wind tower maker Suzlon Wind Energy Corp for breaching a supply agreement.

Trinity Structural Towers, Inc., a subsidiary of Trinity Industries, Inc., has announced that it filed a breach of contract law suit against Suzlon Wind Energy Corporation for failure to comply with its purchasing obligations for structural wind towers from TSTI pursuant to the 2008 Supply Agreement between the two companies.

The law suit was filed in the District Court of Dallas County.

Mutually agreed to amend the agreement
In accordance with the Agreement, Suzlon agreed to purchase approximately $377.3 million worth of TSTI manufactured 80-meter wind towers on a scheduled basis through 2011. Following the execution of the agreement, TSTI and Suzlon mutually agreed to amend the agreement on two separate occasions, ultimately resulting in an additional $123.8 million worth of wind towers to be purchased and extending the delivery timeframe of wind towers through 2013.

Failing to take delivery of its obligated number of wind towers
To date, TSTI has produced and delivered approximately $88.6 million worth of wind towers, excluding price adjustments related to materials costs, applicable to the aggregate wind tower purchase obligation agreed upon under the agreement, as amended. TSTI claims that Suzlon has breached its contractual purchase obligations for 2010 and 2011 by failing to take delivery of its obligated number of wind towers during this period. In addition, Suzlon has not yet secured its 2012 and 2013 production space for its obligated purchase of wind towers in each of these years.

Read more: Suzlon Group wins 100.8 MW repeat order

TSTI has incurred, and continues to incur, damages as a result of Suzlon’s alleged breach of its purchase obligations. TSTI has been, and remains willing and able, to perform its obligations under the agreement, as amended.

Suzlon’s remaining purchase commitment under the agreement, as amended, represents approximately $412.5 million of TSTI’s total wind tower backlog of approximately $929.5 million as reported on September 30, 2011. The wind towers pertaining to the agreement remain in TSTI’s backlog, pending an outcome in the litigation.

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