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LEGAL PROCEEDINGS
12 Months Ended
Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]  
Legal Matters and Contingencies [Text Block]

NOTE 4 - LEGAL PROCEEDINGS

 

In the normal course of business, the Company may become subject to lawsuits and other claims and proceedings. Such matters are subject to uncertainty and outcomes are not predictable with assurance. Management is not aware of any pending or threatened lawsuits or proceedings which would have a material effect on the Company’s financial position, liquidity, or results of operations other than as follows:

 

The Swiss Proceeding

 

In March 2009, Intercomsoft commenced an action in the court of first instance in Geneva Switzerland for the appointment of an arbitration tribunal in connection with its claims against the Ministry of Economics of the Republic of Moldova and the Government of the Republic of Moldova (the “Moldovan Defendants”) seeking damages for breach of contract and an injunction to prohibit Moldova from further producing essential government documents for the Republic of Moldova including passports, driver’s licenses, permits and national identification documents, which Intercomsoft had produced from 1996-2006, pursuant to the terms of the ten year Supply Agreement (the “Swiss Proceeding”). The Swiss court granted Intercomsoft’s request to establish an ad hoc arbitration panel to hear the merits of its claims in such proceeding.  Such action is pending and there can be no assurances as to its outcome.

   

The Moldovan Proceeding

 

In November 2010, the Moldovan Defendants commenced an action before the courts of Moldova claiming that the Supply Agreement was properly terminated on April 29, 2006 and seeking reimbursement of certain legal costs (the “Moldovan Proceeding”). Intercomsoft asserted a counterclaim seeking redress for various claims and damages, including interest and penalties which continue to accrue pursuant to the terms of the Supply Agreement. In July 2011 the District Court in Chisinau, Moldova issued a Judgment rejecting the Moldovan Defendants’ claim for reimbursement of legal costs as unfounded, and awarded approximately $35.6 million in damages to Intercomsoft. The Moldovan Defendants appealed the decision of the Moldovan District Court to the Economic Appeal Court in Chisinau, Moldova and in December 2011 the Appeal Court partially upheld the Judgment of the District Court, similarly rejecting the Moldovan Defendants’ claim, and reduced the damage award to Intercomsoft to approximately $20.75 million. The Moldovan Defendants further appealed the decision of the Appeal Court to the Supreme Court of Justice in Moldova. In September 2012, the Supreme Court of Justice partially upheld the judgment of the Economic Appeal Court rejecting the Moldovan Defendants’ claim and further reduced the damage award to Intercomsoft to approximately $4 million. The Moldovan Defendants had a right to appeal that judgment if such appeal was filed on or before November 15, 2012. To date, Intercomsoft has not been notified that any further appeal was filed.

 

There can be no assurance as to the outcome of such legal actions.