Trinity Structural Towers Files Breach-Of-Contract Lawsuit Against Suzlon

Posted by NAW Staff on January 05, 2012 No Comments
Categories : New & Noteworthy

Wind tower manufacturer Trinity Structural Towers Inc. (TSTI), a subsidiary of Trinity Industries Inc., has filed a breach-of-contract lawsuit against Suzlon Wind Energy Corp.

TSTI claims that Suzlon failed to comply with its purchasing obligations for structural wind towers from TSTI, pursuant to the 2008 supply agreement between the two companies. The lawsuit was filed in the District Court of Dallas County.

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 time frame of wind towers through 2013, TSTI explains.

TSTI says that to date, it 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 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.

Furthermore, TSTI says it has incurred, and continues to incur, damages as a result of Suzlon's alleged breach of its purchase obligations, and the company says it 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 Sept 30. The wind towers pertaining to the agreement remain in TSTI's backlog, pending an outcome in the litigation.

A Suzlon spokesperson told NAW that the company is still working to resolve the issue.

‘This matter is, unfortunately, a direct consequence of the downturn in the U.S. market over the past two years," the spokesperson said. "Trinity continues to be a preferred supplier for Suzlon, and we are committed to finding a mutually agreeable solution. Given the matter is sub judice, it would be inappropriate to comment further.’

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