Cemex 2012 Annual Report Download - page 115

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Notes to the
consolidated
financial
statements
115
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• In July 2008, Strabag SE (“Strabag”), one of the leading suppliers of building materials in Europe, entered into a Share
Purchase Agreement (“SPA”) to purchase CEMEX’s operations in Austria and Hungary for €310 (US$409 or $5,256), subject
to authorization of the competition authorities in such countries. On July 1, 2009, Strabag notified CEMEX of its purported
rescission of the SPA, arguing that the regulatory approvals were not obtained before June 30, 2009. In October 2009,
CEMEX filed a claim against Strabag before the International Arbitration Court of the International Chamber of Commerce
(“ICC”), requesting a declaration that Strabag’s rescission of the SPA was invalid and claiming the payment of damages
caused to CEMEX for the alleged breach of the SPA for €150 (US$198 or $2,544). After a period of hearings, counterclaims,
responses and the conformation of the arbitration tribunal, a final award dated May 29, 2012, was notified to CEMEX on June
1, 2012. According to this final award, the arbitral tribunal declared that Strabag’s rescission of the SPA was unlawful and
ineffective, and ordered Strabag to pay to CEMEX a compensation for damages (including accrued interest), arbitration and
legal costs. Also, Strabag’s counterclaim was dismissed. Strabag filed an annulment action before the Swiss Federal Supreme
Court (the “Swiss Court”) on July 2, 2012. In relation to the annulment process with the Swiss Court, on July 20, 2012,
Strabag paid CEMEX, through RMC Holdings B.V., the amounts ordered by the arbitral tribunal on its final award (principal
plus surplus accrued interest and expenses) for approximately €43 (US$57 or $732), and, in order to secure the potential
obligation for RMC Holdings B.V. to repay these amounts to Strabag in the event that the Swiss Court resolves to annul the
May 29, 2012 final award, RMC Holdings B.V. pledged in favor of Strabag 496,355 shares (representing approximately a
33% stake) in its subsidiary Cemex Austria AG. On September 6, 2012, CEMEX presented its reply to the annulment action
before the Swiss Court, and expects a final judgment during the first quarter 2013. CEMEX considers the likelihood of a
negative resolution from the Swiss Court to be very remote. As a result, the amount of the final award mentioned above was
recorded in the statement of operations in 2012, of which approximately €35 (US$46 or $591) identified with CEMEX’s
damages was recognized as part of other expenses, net, and approximately €8 (US$11 or $141) related to the recovery of
operating losses and expenses caused by Strabag was recognized as part of costs and administration expenses.
• In April 2006, the cities of Kaštela and Solin in Croatia published their respective development master plans, adversely
impacting the mining concession granted to a CEMEX’s subsidiary in Croatia by the Croatian government in September
2005. In May 2006, CEMEX filed an appeal before a constitutional court seeking a declaration by the court of its rights
and seeking prohibition of the implementation of the master plans. The municipal courts in Kaštela and Solin had previously
rejected the appeals presented by CEMEX. These resolutions were appealed. These cases are currently under review by the
Constitutional Court in Croatia, and it is expected that these proceedings will continue for several years before resolution.
During the proceedings, the Administrative Court in Croatia ruled in favor of CEMEX, validating the legality of the mining
concession granted by the government of Croatia. This decision was final. However, as of December 31, 2012, CEMEX has
not been notified of an ocial declaration from the Constitutional Court as to whether the cities of Kaštela and Solin, within
the scope of their master plans, can unilaterally change the borders of exploited fields. CEMEX believes that a declaration of
the Constitutional Court will enable it to seek compensation for the losses caused by the proposed changes to the borders
of the land available for extraction.