Decision of Court of Arbitration

The Management Board STALEXPORT S.A. informs that on 29th May 2006 received from its proxy an information about a decision of Court of Arbitration ad hoc (a judgment dated 26.05.2006), appointed in regard to determining the range of the responsibility of STALEXPORT S.A. towards plaintiffs ? the Bank Syndicate, as guarantor of liabilities of Walcownia Rur ?Jedność? Sp. o.o., in the light of provisions of point 2 and 7 of the Guarantee Agreement dated 30thh March 1998 concluded between STALEXPORT S.A. and Bank Śląski S.A. (at present ING Bank Śląski S.A.) acting on its own behalf and on the behalf of plaintiffs (banks participating in syndicate).

The Court of Arbitration ad hoc, after carrying out a trial on 22nd May 2006 fixed that the range of responsibility of the defendant - STALEXPORT S.A., as the guarantor of liabilities of Walcownia Rur Jedność Sp. z o.o. towards plaintiffs, results from the principle presented in point 7 of the Agreement of Guarantee and in connection with that:

1. adjudged from defendant- STALEXPORT S.A. for the benefit of banks ? plaintiffs the amount of 33,447,189.48 zloty (say: thirty three million four hundred forty seven thousand one hundred eighty nine 48/100) along with interests calculated from 4th March 2005 till the date of passing by the Management Board of STALEXPORT S.A. a resolution regarding an increase of the equity capital of STALEXPORT S.A., according to the 3 months rate WIBOR + 1,5 %;
2. dismissed a claim in the other rang, i.e. as far as the amount of 31,713,430.69 zloty (say: thirty one million seven hundred thirteen thousand four hundred thirty 69/100).

Moreover the Court of Arbitration ad hoc adjudged from the defendant for the benefit of Bank Syndicate the amount of 58,500 zloty (say: fifty eight thousand five hundred) by virtue of reimbursement of the half of paid advance and counted among costs of proceedings.
The above decision of the Court of Arbitration ad hoc in the part adjudging the amount of 33,447,189.48 zloty totally wyczerpuje claims of Band Syndicate towards STALEXPORT S.A. by virtue of the a/m Guarantee Agreement.

Referring to the report no 19 dated 4th May 2006 regarding The Agreement with banks in regard to Walcowania Rur Jedność Sp. z o.o. ? the Management Board of STALEXPORT S.A. moreover informs that according to the provisions of a/m Agreement, the claims of Bank Syndicate by virtue of granted by STALEXPORT S.A. guarantee, will be totally satisfied by conversion of the a/m liability into shares in the increased capital of the Company, in connection with that the decision of the Court of Arbitration does not result in the duty of STALEXPORT S.A. of cash allowances for the benefit of the Bank Syndicate.