Sharp to Pay LG Display for Breach of Contract
In December 2013 LG Display (LPL) and Sharp (6753.JP) entered into a cross-licensing contract concerning the use of display IP, however LG Display recently found that Sharp had violated the contract in a specific area (undefined) and requested the case go to arbitration, using the Singapore International Arbitration Center for a ruling in December of 2019. According to a release by Sharp, the arbitration panel has decided that Sharp was in violation of the agreement and must pay ~$95m to LG Display as compensation for damages, although the details of the infringement remain confidential under arbitration rules.
There has been no date set for the payment, although Sharp has indicated that it will revise its full year 2022 (March year) consolidated financial results to reflect the payment. While the agreed upon arbitration settlement is far below LG Display’s original claim for $840m in damages, it represents almost 3x LGD’s operating profit last quarter, and while having little to do with LG Display’s actual operating profit or loss in 2Q, it will certainly be a factor in the reported net metrics.
There has been no date set for the payment, although Sharp has indicated that it will revise its full year 2022 (March year) consolidated financial results to reflect the payment. While the agreed upon arbitration settlement is far below LG Display’s original claim for $840m in damages, it represents almost 3x LGD’s operating profit last quarter, and while having little to do with LG Display’s actual operating profit or loss in 2Q, it will certainly be a factor in the reported net metrics.
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