Moldovan Government could pay damages of over USD 40 mln for violating international contract

American company Trimol Group Inc and Intercomsoft Ltd. ("Intercomsoft"), the Company's wholly owned subsidiary, filed a Demand for Arbitration against the Government of the Republic of Moldova with the International Court of Arbitration in Geneva, Switzerland, seeking damages of not less than $41 million, informs www.moldova.org, cited by Info-Prim Neo. Intercomsoft is a technology-intensive company which has operated computerized photo identification and database management system used in the production of various secure government identification documents. Pursuant to a Contract on Leasing Equipment and Licensing Technology awarded to it in April 1996 by the Government of the Republic of Moldova (the "Supply Agreement"), Intercomsoft has provided the Government with the equipment, technology, software, materials and consumables necessary for the production of all national passports, drivers' licenses, vehicle permits, identification cards and other government authorized identification documents. The Demand For Arbitration filed by Intercomsoft asserts that the Government of the Republic of Moldova is in breach of the express provisions of the Supply Agreement with Intercomsoft and seeks payment of approximately $41 million as a consequence of such breach. "The Company is extremely disappointed that the Government of Moldova, without justification or explanation, has failed to comply with its contractual obligations to Intercomsoft," stated Jack Braverman, Chief Financial Officer of Trimol Group, Inc. "It is disconcerting that a foreign government of an emerging country such as Moldova would send a message to investors and the international financial community that they will not honor their contractual commitments," Braverman added. Intercomsoft states that as a long-standing supplier to Moldova, it invested substantial sums in Moldova to establish, install, and maintain the equipment and provide the materials and consumables used to produce Moldova's passports, national identification cards, drivers' licenses, and other essential government documents over the past decade. Moldova continues to use that equipment and the license given to it to operate such equipment in contravention of its contractual obligations. "We are surprised that the Government of Moldova would so brazenly cease payments due under a Government contract while continuing to use proprietary technology and equipment of a corporate vendor in blatant disregard of its contractual obligations," Braverman stated. "If the Government of Moldova condones the blatant disregard of Government contracts and obligations such as its contractual obligation to Intercomsoft under the Supply Agreement, it is not hard to understand why the World Bank recently reported that Moldova dropped from 88th to 103rd place in the World Bank's rankings of the ease of doing business in other countries," the representative of Trimol Group Inc. specified. "Regrettably, the actions of the Government of Moldova have left the Company no choice but to pursue its legal remedies in order to protect the interests of its public shareholders”, Braverman said in the end of the declaration. Previously, Intercomsoft Ltd, warned the Ministry of Informational Development of Moldova about the violations of the Contract on Leasing Equipment and Licensing Technology signed in April 1996, as well as about the volume of the solicited compensation. These warnings came after long-term negotiations with Moldovan authorities and the company relied on a correct settlement of the conflict. Intercomsoft disputes the Governmental decision of the Government, according to which the leasing contract, valid until April 29, 2006, will not be prolonged. The company warned the Government from Chisinau, that in case it will not pay for the provided services and equipment it will initiate legal proceedings against Moldova