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Faraday Future Settles HKIAC Arbitration

In late 2017, Evergrande Health, a Chinese company, reportedly invested approximately $2 billion in Faraday Future, Inc., a US-based automotive and technology company.

Not long after, however, in October 2018, Faraday initiated an arbitration against Evergrande Health at the Hong Kong International Arbitration Centre, alleging that Evergrande’s parent company breached its funding commitment to Faraday’s parent company.

Faraday filed an emergency application, and the arbitrator ruled that Faraday was permitted to seek funding from other sources. On December 31, 2018, Faraday issued a release in which it stated that it had entered into a “newly agreed upon restructuring agreement” with “its investor Season Smart (Evergrande Health wholly-owned subsidiary).”

As part of the new agreement, both “parties agreed to terminate the previous investment contract, withdraw and waive all current litigation and arbitration proceedings, and release all security including the asset preservation pledge and equity financing rights.”

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