Funai Electric Co. Ltd (Osaka, Japan) filed a counterclaim (compensation for damages) against Philips in the two companies' pending arbitration.
The two companies agreed in January of 2013 that Philips would transfer its audio-video business to Funai. In October, Philips said it was terminating that agreement after, it said, Funai "refused to take the necessary steps to enable completion of the transaction and the transfer of the business."
Funai claimed in December that Philips was unable to complete the spin-off of the business in a timely manner, despite two postponements of the transaction completion date."
Funai also said that the Business that Philips intended to sell to Funai "differed markedly from what Philips explained to Funai," and that its profitability had been notably declining in 2013.
In a press release, Funai said it was continuing with negotiations to complete the transaction "based on its good business relationship of mutual trust with Philips for over 25 years," until Philips broke off negotiations and filed a petition for arbitration with the International Court of Arbitration on October 25, 2013.
Per Funai, these and other actions mean that Philips is in breach of its agreement with Funai.
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