An arbitration court has ruled that Siemens violated its shareholder pact with Areva by forming a nuclear alliance with Russia's Rosatom.
"According to the tribunal's ruling, Siemens had not fully met its contractual obligations toward its former joint venture partner Areva," Siemens said in a statement, reports Reuters. "Consequently Siemens will have to pay Areva EUR648m ($929m) plus interest," it added.
Siemens announced in 2009 it was exiting its nuclear joint venture Areva NP and would sell its 34 per cent stake in the venture to partner Areva. But the terms of their divorce ran into legal problems as Siemens entered into a nuclear joint venture with Russia's Rosatom also in 2009.
Areva threatened Siemens with legal action, saying the German conglomerate was contractually banned from competing with Areva for eight years. In late 2009, Areva said a court had blocked the tie-up plans of Siemens and Rosatom until the French and German companies complete mediation over the price of the German group's exit from Areva NP.
A price tag of EUR1.62bn for the 34 per cent stake was finally determined by independent experts in April, but the value of that stake was still subject to a final ruling by the arbitration tribunal of the International Chamber of Commerce (ICC) in Paris. That body made its ruling on Thursday, Siemens said. Siemens' nuclear alliance with Rosatom has been put on hold pending that ruling.
Last year, Siemens waged a parallel legal battle by asking the European Commission to overturn the non-competition clause that would prevent it from competing with Areva for eight years. The EU is still investigating the case.
Siemens said on Thursday the arbitration tribunal limited the term of the non-compete clause in the partnership agreement of the former joint venture to four years.
"The restriction on competition will now run until September 25, 2013," Siemens said. It also said it had realized a profit of EUR1.52bn before taxes in the second quarter of fiscal 2011 as a result of its stake sale to Areva.
The payment now due to Areva will be recognized in Siemens' income statement for the third quarter of fiscal 2011, it added.