U.S. listed Genesis Pharmaceuticals Enterprises,a pharmaceutical company with its principal operations in China, has announced that an American Arbitration Association arbitration panel rejected requests by Capital Research Group, Inc. to award it USD13.8 million and Capital Research Group Partners, Inc. to award it USD13.7 million in a joint arbitration proceeding against Genesis alleging the breach of three consulting agreements entered into by Genesis.
In early February 2009, after the arbitration panel heard CRG and CRGP claims and Genesis counterclaims, the panel awarded a total of USD980,070.50 to CRG and CRGP jointly, representing less than 4% of the damages sought by CRG and CRGP. The panel also denied CRG and CRGP requests for costs and pre-judgment interest, and stated that once the award is satisfied, CRG and CRGP will have no further claims against Genesis stock or other assets targeted in the arbitration proceeding.
A few days before the decision by the arbitration panel became available, two arbitration proceedings filed against Genesis by related parties China West, LLC and China West II, LLC were withdrawn.
"Although we are disappointed that the arbitration panel awarded a settlement, which the Company will pay, in the arbitration proceeding brought against us by CRG and CRGP, we believe that this outcome will have a minor negative impact on Genesis," said Wubo Cao, CEO of Genesis. "Now that the arbitration proceeding brought against us by CRG and CRGP is successfully concluded, and China West and China West II have withdrawn their arbitration proceedings against us, we can once again fully focus on managing and growing Genesis."