DHL Files Demand for Arbitration Against ABX

For several months, DHL and ABX have been involved in a contractual dispute over DHL’s responsibility for certain overhead expenses under the ACMI and Hub Services agreements. Under these agreements, DHL pays ABX overhead but is entitled to a reduction of such payments to ABX when its services for parties other than DHL exceed a certain amount. The $8.8 million in dispute between the companies relates largely to this overhead cost reduction for DHL and other overhead costs of ABX that DHL believes it is not responsible for.

Contract disputes arise regularly as part of the normal course of a business relationship. Under the operating agreements in place between DHL and ABX they are to resolve such disputes through negotiation and, if that fails, arbitration. DHL and ABX have sought to negotiate and resolve this overhead allocation issue. This was unsuccessful, so DHL has now filed for arbitration of these overhead claims and, pending resolution of this matter, DHL has paid ABX the $8.8 million currently in dispute in consideration of ABX’s commitment to arbitration. DHL believes its claims to the $8.8 million are meritorious and that it will be awarded these sums at arbitration.

Finally, DHL wholly rejects the assertion that the company is or has ever been in default of its agreements with ABX, and both parties are fully honoring these agreements. DHL has at all times complied with its contracts with ABX and expects to continue in the same manner. Likewise, ABX has stated that it will maintain its full service to DHL and its customers while these business disputes are resolved through arbitration.