Genesis defends itself in arbitration

Genesis Pharmaceuticals Enterprises, a US drug company with its principal operations in China, says that an American Arbitration  Association panel rejected requests by Capital Research Group to award  it $13.8 million and Capital Research Group Partners $13.7 million in a  joint arbitration proceeding against Genesis, alleging the breach of  three consulting agreements entered into by the firm.

On February 2, after the arbitration panel heard CRG and CRGP claims and  Genesis counterclaims, the panel awarded a total of $980,070.50 to CRG  and CRGP jointly, representing less than 4% of the damages sought by  the two. The panel also denied CRG and CRGP requests for costs and  pre-judgment interest, and stated that, once the award is satisfied,  both will have no further claims against Genesis stock or other assets  targeted in the arbitration proceeding. A few days before the decision  by the AAA panel became available, two arbitration proceedings filed  against Genesis by related parties - China West and China West II were  withdrawn.

"Although we are disappointed that the arbitration panel awarded a  settlement, which the company will pay, in the arbitration proceeding  brought against us by CRG and CRGP, we believe that this outcome will  have a minor negative impact on Genesis," commented Wubo Cao, chief  executive of the company.