Kuwait’s Petrochemical Industries Company (PIC) has paid out $2.2bn in damages to Dow Chemical Company, following an arbitration ruling in May 2012, ending a four-year dispute with the US firm.

The payment reflects the full damages awarded by the International Chamber of Commerce (ICC), as well as Dow’s costs, according to a 7 May statement from Dow.

The ICC ruled in May 2012 that PIC, a subsidiary of state-owned Kuwait Petroleum Corporation, had violated its agreement with Dow Chemical when it reversed an agreement to enter into a 50-50 joint venture worth $17.4bn in December 2008.

As part of the agreement, Dow was to receive $9bn in pre-tax profits at the start of the K-Dow Petrochemicals joint venture, and PIC was also to pay Dow $7.5bn for its stake in the venture.

A deal had been announced on 4 December 2008, after almost 12 months of planning, but was cancelled on 28 December, after Kuwait’s Supreme Petroleum Council, the country’s highest oil decision-making body withdrew its support and approval for the deal.

Kuwait’s parliament argued that Kuwait was overpaying on its $7.5bn investment, and that the US firm was unloading some of its ageing US assets, with some plants more than 40 years old.

PIC and Dow are still partners on several other projects, including ME Global, and the Equate polymers joint venture, where the two are equal 42.5 per cent stakeholders.