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65
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide Corporation (“Union Carbide”), a wholly owned subsidiary of the Company, is and has been involved in a large
number of asbestos-related suits filed primarily in state courts during the past four decades. These suits principally allege
personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages.
The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing
products located on Union Carbide’s premises, and Union Carbide’s responsibility for asbestos suits filed against a former
Union Carbide subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they
have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to
Union Carbide’s products.
It is the opinion of Dow’s management that it is reasonably possible that the cost of Union Carbide disposing of its asbestos-
related claims, including future defense costs, could have a material impact on the Company’s results of operations and cash
flows for a particular period and on the consolidated financial position of the Company.
The table below provides information regarding asbestos-related claims filed against Union Carbide and Amchem based on
criteria developed by Union Carbide and its external consultants.
2014 2013 2012
Claims unresolved at January 1 29,005 33,449 53,225
Claims filed 8,857 12,069 9,627
Claims settled, dismissed or otherwise resolved (11,746) (16,513) (29,403)
Claims unresolved at December 31 26,116 29,005 33,449
Claimants with claims against both UCC and Amchem (8,209) (8,331) (9,542)
Individual claimants at December 31 17,907 20,674 23,907
Plaintiffs’ lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the
damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when
specific damages are alleged with respect to a specific disease or injury. In fact, there are no personal injury cases in which only
Union Carbide and/or Amchem are the sole named defendants. For these reasons and based upon Union Carbide’s litigation and
settlement experience, Union Carbide does not consider the damages alleged against Union Carbide and Amchem to be a
meaningful factor in its determination of any potential asbestos-related liability.
For additional information see Part I, Item 3. Legal Proceedings and Asbestos-Related Matters in Note 14 to the Consolidated
Financial Statements.
K-Dow Arbitration
In February 2009, the Company initiated arbitration proceedings against Petrochemical Industries Company (K.S.C.) ("PIC")
alleging that PIC breached the Joint Venture Formation Agreement related to the establishment of K-Dow, a proposed 50:50
global petrochemicals joint venture with PIC, by failing to close the transaction. In May 2012, the International Court of
Arbitration of the International Chamber of Commerce ("ICC") awarded the Company $2.161 billion in damages ("Partial
Award"), not including pre- and post-award interest and arbitration costs. On March 4, 2013, the ICC released the Final Award
in the arbitration case covering the Company's claim for pre- and post-award interest and arbitration costs and awarded the
Company $318 million, as of February 28, 2013. On May 6, 2013, the Company and PIC entered into a Deed providing for
payment of the Company's claims against PIC under the K-Dow arbitration. On May 7, 2013, the Company confirmed the
receipt of a $2.195 billion cash payment from PIC, which included the Partial Award of $2.161 billion as well as recovery of
Dow's costs incurred in the arbitration, including legal fees. In addition, Kuwait Petroleum Corporation provided assurances
that no retaliatory or punitive actions would be taken against the Company and its affiliates as a result of the Deed and
payment. The K-Dow arbitration is considered final and settled in full.