RNS Number:2987T
Provalis PLC
16 December 2003


For Immediate Release                                        16th December 2003



               Provalis awarded #1.6m from Dimethaid Arbitration


Provalis plc (LSE: PRO; NASDAQ: PVLS), the Medical Diagnostics and
Pharmaceuticals Group, announces that the arbitration it commenced against
Dimethaid International Inc. following Dimethaid's termination of the Pennsaid
distribution agreement has been decided in Provalis' favour, and that as a
result Provalis has been awarded the compensatory sum of just over #1.2m,
together with costs and interest of approximately #360k.


Dr Phil Gould, Chief Executive Officer of Provalis, said "I am very pleased with
the outcome of the arbitration and that this matter has now been brought to a
close. This award will reinforce our cash position and assist the development of
the Group."



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Provalis' Internet Website ; http://www.provalis.com


"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of
1995: Statements in this announcement that relate to future plans, expectations,
events, performances and the like are forward-looking statements as defined in
the US Private Securities Litigation Reform Act of 1995. Actual results of
events could differ materially from those described in the forward-looking
statements due to a variety of factors. Such factors include, among others: the
viability of the Group's products, which are at various stages of development;
the generation of sufficient operating cash flow by the Group's pharmaceutical
and medical diagnostic businesses to finance the ongoing development of these
businesses as well as the Group's research and development activities; the
success of the Group's research and development strategy and activities;
uncertainties related to future clinical trial results and the associated
regulatory process; the execution and success of collaborative agreements with
third parties; availability and level of reimbursement for the Group's products
from government health administration authorities or other third-party payors;
the rate of net cash utilisation within the Group and, hence, the Group's
possible need for additional capital in the short, medium and/or long term; the
Group's intellectual property position and the success of patent applications
for its products and technologies; the Group's dependence on key personnel;
general business and economic conditions; the impact of future laws, regulations
and policies; stock market trends in the Group's sector; and other factors
beyond the Group's control that may cause the Group's available capital
resources to be used more quickly than expected. These and other factors that
could affect the Company's future results are more fully described in its
filings with the US Securities and Exchange Commission, in particular the latest
20-F filing, copies of which are available from the Company Secretary at the
Company's registered address.


For further information:-


Dr Phil Gould, Chief Executive Officer, Provalis plc, Tel: 01244 833463

Mr Peter Bream, Finance Director, Provalis plc, Tel: 01244 833552

Mr Lee Greenbury, Company Secretary, Provalis plc, Tel: 01244 833402

Lisa Baderoon, Buchanan Communications, Tel: 020 7466 5000



Notes to Editors


Provalis plc (LSE:PRO and NASDAQ:PVLS) is a diversified healthcare company with
two operating businesses:-


* Medical Diagnostics - develops and sells to world markets
medical diagnostic products for chronic disease management. The division's
principle products are Glycosal(R) and Osteosal(R) in the areas of diabetes and
osteoporosis respectively.


* Pharmaceuticals - sells and markets its own, and third
party, branded, prescription medicines in the UK and Ireland to GPs and
hospitals through its own regionally managed sales force. The division's
principle product is Diclomax(R), a medicine for use in the treatment of
musculo-skeletal disorders, and it also sells products in the areas of
gastroenterology, osteoporosis, migraine and dermatology.



Pennsaid Distribution Agreement


The distribution agreement under which Provalis Healthcare was appointed to
distribute Pennsaid in the UK was signed by Provalis Healthcare Limited and
Dimethaid International Inc on 5th January 2001.


On 14th June 2002, Provalis plc announced that it had unexpectedly received a
notification from Dimethaid International Inc. purporting to terminate the
Pennsaid distribution agreement, but that Provalis did not believe Dimethaid was
entitled to terminate the agreement.


On 20th June 2002, Provalis further announced that following a review of the
position it had concluded that, whilst Dimethaid was not entitled to terminate
the Agreement, the actions taken by Dimethaid had irreparably damaged the
relationship between the two companies and that as a consequence, Provalis had
no alternative but to treat the Agreement as terminated.


Provalis subsequently commenced arbitration proceedings against Dimethaid
seeking full compensation for its losses. The arbitration hearing was held
during the week commencing 6th October 2003, and Provalis was notified of the
arbitration award on 15th December 2003.







                      This information is provided by RNS
            The company news service from the London Stock Exchange

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