FLSmidth Says Larsen & Toubro violates licensing deal

FLSmidth A/S said it will take all actions necessary to prevent Indian company Larsen & Toubro Ltd from breaching alleged contractual obligations and alleged infringement of FLSmidth’s know-how and proprietary rights.  FLSmidth said the action stems from the termination of a licensing agreement with L&T, with effect from November 2004. 

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 June 6 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 said.   FLSmidth further said it 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.