Case stems from LoJack's termination of technology licence agreement with Chinapac's subsidiary in China
HONG KONG, Aug. 12 /PRNewswire-Asia/ -- On 18th May 2009 Chinapac Ltd's subsidiary, Kington Holdings Ltd., announced that it had obtained an award in arbitration proceedings instituted against it by LoJack Equipment Ireland Ltd., a subsidiary of LoJack Corporation (Nasdaq: LOJN), following LoJack Equipment Ireland's termination of the Technology License agreement for China it had with Kington Holdings Ltd.
In the award, the US arbitrator ruled that LoJack Equipment Ireland had improperly terminated the License Agreement and breached its implied covenant of good faith and fair dealing. The assessment of damages was deferred by the arbitrator and will be heard in November this year.
On 4th August 2009, Chinapac Ltd., Kington Holdings Ltd and another filed a Writ of Summons with endorsed statement of Claim in Action No.1702/2009 in the High Court of Hong Kong. The Statement of Claim states, in effect and among other things:
1. that the breaches and improper termination of the License Agreement
were gross and made without any legitimate or reasonable purpose;
2. that LoJack Equipment Ireland Ltd filed a Motion in the arbitration
proceedings claiming that Kington Holdings, in the License Agreement
waived its right to damages even if LoJack Equipment Ireland terminated
the agreement unlawfully;
3. that LoJack Corporation and LoJack Equipment Ireland Ltd have breached
their obligations under an agreement made between LoJack
Corporation/LoJack Equipment Ireland Ltd and Chinapac Ltd ("Head
Agreement")to perform the License Agreement and other related
agreements;
4. that LoJack Corporation has breached its obligation under the Head
Agreement to procure the performance of the License Agreement by LoJack
Equipment Ireland Ltd;
5. that, alternatively, LoJack Corporation has caused LoJack Equipment
Ireland Ltd to breach its obligations under the License Agreement;
6. that the breaches of the License Agreement and the Head Agreement
amount to total failure of the consideration for which Chinapac Ltd
entered into the Head Agreement and Kington Holdings into the License
Agreement.
In the Statement of Claim the claimants seek an order that certain financial and security documents entered into pursuant to the Head Agreement be declared null and void and set aside. They also claim damages in the amount of US$269 million (less any damages recovered by Kington Holdings Ltd in the arbitration proceedings) or alternatively repayment of all sums invested in reliance upon the promises of LoJack Corporation and LoJack Equipment Ireland Ltd to perform their obligations under the Head Agreement and the License Agreement.
The full text of the Statement of Claim in Action 1702/2009 is available from the High Court of Hong Kong or by re-mail request to Jo Soo at jo.soo@edelman.com .
About Kington and Chinapac
Kington Holdings Ltd. is a Cyprus company headquartered in Beijing PRC, set up pursuant to the agreement with LoJack to operate the LoJack Stolen Vehicle Recovery Service in China.
Chinapac Ltd is a company incorporated in Hong Kong and the owner of the entire issued capital of Kington.
Media contact:
Jo Soo
Edelman
Tel: +852-2837-4744
Fax: +852-2804-1303
Email: jo.soo@edelman.com