Tuesday, December 29, 2009

Repudiation risk

Yet more forms of brinksmanship. The full article
mentions a possible defense of inadequate authority
as the company in qustion claims the contracts were
entered "without authorization"...if that is the case
why negotiate at all?

BEIJING, Dec 29 (Reuters) - A small Chinese power generator on Tuesday
rejected demands from a Goldman Sachs unit to pay for nearly $80
million lost on two oil hedging contracts, part of a long-running
dispute over how China deals with derivatives losses.

...So far no legal action has been taken and many lawyers and industry
analysts believe that Chinese firms and their foreign banks are quite
likely to settle their disputes privately or through arbitration,
similar to a handful of previous cases in the mid-1990s.


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