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Larsen & Toubro violates licensing agreement with FLSmidth

16.06.2005
Press Release, 16 June 2005

FLSmidth being the leading global supplier to the cement industry has for more than 60 years been established in India and is the leading supplier of cement production technology to the Indian cement industry. Up to 2004 FLSmidth's presence on the Indian market was partly based on a fruitful licensing agreement and cooperation with the leading Indian industrial company Larsen & Toubro (L&T) and partly based on its own business in India through Fuller India Ltd.
However, with effect from November 2004 FLSmidth eventually terminated the licensing agreement which allowed L&T to use FLSmidth know-how and technology under the terms of the licensing agreement. According to the agreement L&T has accepted not to utilise FLSmidth's know-how and proprietary rights and to refrain from competition with FLSmidth for a period of five years.
 
On Monday 6 June L&T issued a press release stating that the company has obtained an order for a cement grinding plant on turnkey basis to Oman Cement Company's plant in Rusayl, Oman. L&T is thereby in breach of its contractual obligations towards FLSmidth in tendering for the project in Oman despite L&T's repeated written confirmation towards FLSmidth that the company will honour its surviving obligations under the licensing agreement. FLSmidth further has reason to believe that L&T's quotation for the said project is based on FLSmidth's know how and technology which L&T obtained access to only for the purpose of the licensing agreement, and that L&T is therefore now directly and actively infringing FLSmidth's know how and proprietary rights.
 
FLSmidth has consequently informed L&T that FLSmidth will take all actions which it deems necessary and fit to protect its rights and to prevent L&T from continuous and deliberate breach of its contractual obligations as well as continuing and deliberate infringement of FLSmidth's know-how and proprietary rights.
 
Please address any questions regarding this announcement to CEO Anders Bech, FLSmidth Limited India, at (+91) 44 52 191234.
 
 
FLSmidth A/S
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