MQTM contracts with Louis Dreyfus, void over price clause

December 16, 2024 (MLN): Maqbool Textile Mills Limited (PSX: MQTM) revealed that two contracts signed with Louis Dreyfus Company Pakistan Pvt. Ltd. (LDC) in 2022 were deemed void due to an undefined price clause lacking clarity on currency and quantity units.

The contract being vague in terms of the price clause not being well defined could not be performed as such, the company's filing on PSX revealed today.

Previously, MQTM entered into three contracts before in 2022 with LDC for the import of raw cotton, in accordance with the company's policy.

At the instance of LDC, those three contracts were cancelled as par and subsequently two fresh contracts were made between the company and LDC.

The above position was duly explained to LDC, who did not accept the factual position regarding the contracts

Consequently, LDC approached the International Cotton Association (ICA) for arbitration.

Inspite of our preliminary objection regarding the contracts being void due to vague price clause which lacked unit of currency as well as unit of quantity, the ICA in total disregard to the factual position proceeded with the arbitration and issued the impugned award.

The company is fully confident that the impugned award is totally unenforceable and void in the eyes of law and will not stand any legal process.

The impugned award also has no impact on trading of Company's stocks at the Pakistan Stock Exchange.

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