After four years of disputes, the International Chamber of Commerce upheld Suzuki’s request that VW sell its 19.9 per cent stake in Suzuki, ending a 2009 agreement between the two companies.
The four-year deal did not yield a single joint agreement between Japanese automotive company Suzuki and its German counterpart Volkswagen, and consequently the 19.9 stake to be sold by VW is valued at about 463 billion yen ($3.8 billion).
In 2011 Suzuki requested the sale of VW’s share but VW refused to collabourate on a new technology. However, VW welcomed the fact that all these disputes had come to an end.
The agreement between the two companies was mainly based upon the fact that VW, which had bought Suzuki stake, wanted to find a way through the Indian market for small cars where the Japanese firm had a pioneering position.
However, after a short period of time, discord erupted as Suzuki accused VW of withholding information that it had promised to share, while VW objected to a Suzuki deal to buy diesel engines from Fiat.
Suzuki said that VW has to sell the stake back to them or a party of the Japanese company’s choosing, while VW said that the buyer of the stake hasn’t been decided yet. VW, which has hired a bank for the sale, said it’s still analyzing the ruling and will determine later who the buyer will be.
Suzuki also faces the prospect of having to pay damages after arbitrators ruled the Japanese company breached the agreement. The amount of any penalties would be addressed in a further stage of the arbitration proceedings, Suzuki said.
The company has “turned misfortunes into opportunities” before and will take time to review its strategic options, said Osamu Suzuki.
