VW row: Suzuki files for arbitration
Suzuki Motors has filed for international arbitration in a bitter dispute with Volkswagen AG after the German automaker refused to sell back its 20% stake in the Japanese company.Updated: Nov 24, 2011 22:27 IST
Suzuki Motors has filed for international arbitration in a bitter dispute with Volkswagen AG after the German automaker refused to sell back its 20% stake in the Japanese company.
Suzuki, a specialist in building small cars profitably for emerging markets, said on Thursday it initiated arbitration procedures with the International Chamber of Commerce International Court of Arbitration in London.
“We see no major financial impact based on the current share price, as VW has already booked a burden of €263 million ($351 million) in Q3/2011 as a result of the reclassification of its Suzuki stake in the balance sheet,” DZ Bank analyst Michael Punzet wrote in a research note.
Accusing its German partner of withholding hybrid technology it promised to share, Suzuki on Nov. 18 declared its two-year alliance with the German company over and demanded a return of the 19.9% stake VW bought for about €1.7 billion in January 2009.
The German company reiterated its refusal that same day and Suzuki said it was prepared to go through an arbitration process that could take up to two years.
A spokesman for the German carmaker reiterated the company would not give in to Suzuki’s demands.
“We're very disappointed by this step that Suzuki is taking and cannot understand it in any way,” he said, adding there was no legal basis that could force VW to sell its shares.
First Published: Nov 24, 2011 22:25 IST