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Suzuki initiates court action against Volkswagen

Suzuki is taking Volkswagen AG to international court. Late last week, the Japanese company broke up the partnership it had held with Volkswagen since 2009. The problem is, Volkswagen is refusing to allow Suzuki to buy back the 19.9 per cent share Volkswagen holds.


Suzuki was planning to give Volkswagen "some time" to come to terms with the break up and settle on an agreement. Volkswagen is refusing to budge though, so Suzuki will take the dispute to the International Court of Arbitration in London.

Arbitration involves getting a third party in to review the circumstances of both parties. A final decision will then be made to settle the dispute which both Suzuki and Volkswagen will be legally obligated to adhere to.

In this case, a review of the circumstances will involve looking into why Suzuki has broken up the partnership. The Japanese company says it is due to Volkswagen not granting Suzuki access to what was originally agreed. Suzuki chairman Osamu Suzuki also said Volkswagen has "continued to refuse our attempts on numerous occasions to resolve these issues through negotiation".

In an announcement yesterday, Suzuki said,

"Suzuki Motor Corporation is today commencing arbitration proceedings in London with the ICC International Court of Arbitration, in order to compel Volkswagen AG to dispose of its Suzuki shares to Suzuki or Suzuki's designated third party.

"The arbitration proceedings follow Suzuki's termination of its alliance with Volkswagen AG on 18 November 2011, and Volkswagen AG's lack of response to Suzuki's requests for the disposition of its shares to Suzuki or Suzuki's designated third party."

Volkswagen is yet to release an official statement on the matter, only saying that it is disappointed that Suzuki has pulled the pin on the partnership, and says that there is no legal foundation to support Suzuki's attempt to retrieve the 19.9 per cent share.

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