Sigma Lithium said on Tuesday its unit received an initiation letter of arbitration from South Korean company LG Energy Solution.
In its request for arbitration, LG Energy alleges that Sigma Lithium is in breach of certain provisions in connection to a lithium supply agreement entered in 2021.
"The claims are completely without merit and intends to defend its interests vigorously," Sigma said in a statement.
US-listed shares of Sigma were down 1.6% at $12.35 in extended trade.
In 2021, Sigma and LG Energy had entered into a six-year offtake agreement for battery grade sustainable lithium concentrate scales from 60 000 t/y in 2023 to 100 000 t/y from 2024 to 2027.