Economy, Auto
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Int’l Court: VW Must Sell Shares in Suzuki

Int’l Court: VW Must Sell Shares in SuzukiInt’l Court: VW Must Sell Shares in Suzuki

Volkswagen must sell its shares in estranged partner Suzuki, an international court has decided, ending a nearly four-year battle over a dysfunctional alliance between the two carmakers.

The decision by the International Court of Arbitration of the International Chamber of Commerce in London was announced by Suzuki in a filing to the Tokyo Stock Exchange, according to Auto News.

Suzuki received the decision the day before.

“It’s good that a resolution came. I feel refreshed. It’s like clearing a bone stuck in my throat,” Suzuki Chairman Osamu Suzuki said at a hastily called news conference in Tokyo. “I’m very satisfied with the resolution. Through it, Suzuki was able to attain its biggest objective.”

The court also found that the alliance was validly terminated when Suzuki submitted notice of termination on Nov. 18, 2011, Suzuki said in the filing. The termination was effective May 18, 2012.

VW, in a separate Aug. 30 statement, acknowledged the ruling and said it will sell its stake. It added that it expects a positive impact on earnings and liquidity from the sale.

VW said it welcomed “the clarity created by this ruling”.

The decision partially upheld VW’s counterclaim against Suzuki that the Japanese automaker had breached parts of their cooperation agreement, which was inked in late 2009.

“The tribunal upheld Suzuki’s claim regarding VW’s disposal of its shares in Suzuki and ordered VW to divest forthwith those shares to Suzuki or a third party designated by Suzuki using a method which is reasonably determined by Suzuki,” Suzuki said. As part of the decision, Suzuki may compensate VW for its breach of agreement, Suzuki said. The amount of any damages will be addressed in another stage of arbitration, it added.

 

Financialtribune.com