Tiffany: Swatch Failed to Manage, in Confidential Arbitration Proceeding

(IDEX Online News) – Breaking its silence, Tiffany & Co. commented on the dispute with Swatch, disclosing that the sides are in a confidential arbitration proceeding initiated by Swatch.

The announcement follows Swatch disclosure on Monday that on March 9 Tiffany filed a $587 million counterclaim to Swatch's $4.1 billion claim.

According to Tiffany, Swatch initiated the arbitration proceeding, seeking damages for alleged contractual breach of agreements to develop a watch business.

The two accuse each other of loss of future earnings. Swatch accuses Tiffany of breaching the license and development agreements by obstructing and delaying development of the watch business.

Tiffany alleges that Swatch has failed to provide appropriate management, distribution, marketing and other resources for Tiffany & Co. brand watches and to honor their contractual obligations regarding brand-management. It further states that Swatch's claim is without merit and intends to vigorously defend the arbitration. Tiffany also questions the calculation of alleged damages.

Finally, Tiffany states that if the Swatch claims were accepted on their merits, the damages award cannot be reasonably estimated but could have a material adverse effect on its consolidated financial statements or liquidity.

The arbitration hearing is currently expected in October.