Mitsubishi Heavy Industries, Ltd.
Not less than 4 billion dollars (approximately 392 billion yen)
As announced on July 19, 2013, the allegations and demands made by SCE disregard the history of the contract negotiations and performance and are factually incorrect, legally unsound, and inappropriate. Through the arbitration process, Mitsubishi will aggressively defend itself by accurately representing the facts involved and the applicable legal principles. At the same time, Mitsubishi will take actions for its counterclaims because it has been damaged by inappropriate actions by SCE regarding the restart of SONGS and the repairs of the steam generators.
Mitsubishi's liability to SCE is limited by the contractual provisions to which the parties agreed, as SCE has discussed in its filing with the U.S. Security and Exchange Commission, and includes an overall limitation of liability (approximately $137 U.S. million) as well as a preclusion of consequential damages, including the cost of replacement power. Accordingly, at this moment, Mitsubishi does not expect there to be an impact by its dispute with SCE on the results of our operations based on the limitation of liability and our belief that Mitsubishi has fulfilled its obligations under the contract.
Additionally, the co-owners of SONGS, San Diego Gas & Electric Company and City of Riverside (Note.2), have filed lawsuits against Mitsubishi alleging breach of the warranty obligations of the contract, tort liability etc. (These lawsuits are now pending at U.S. District Court in Southern District of California). Mitsubishi believes that all disputes pertaining to the contract should be resolved by the arbitration and has filed motions requesting the Court for a stay of the suits.
If there are any new matters which require disclosure, Mitsubishi will update the information promptly.
Note.1 Edison Material Supply LLC is a wholly-owned subsidiary of SCE.
Note.2 SONGS is co-owned by SCE (78.2%), San Diego Gas & Electric Company (20%), and City of Riverside (1.8%).