The almost 3 year old arbitration between VW and Suzuki came to an end with courts ordering VW to sell back its 19.9% shares in Suzuki. The short-lived partnership between the German and Japanese automobiles companies began in 2009 with VW wanting to expand into the growing Indian passenger car market and Suzuki needing access to small vehicle technology. The 2009-10 marked the highest volume of sales for the Indian automotive industry.
The relationship soured when the joint venture failed to materialise resulting in Suzuki purchasing diesel engines from Fiat, which was viewed by VW as a breach of contract. With no agreement reached between the two parties, Suzuki filed a case with the International Arbitration court in November 2011.
VW has been ordered to sell its shares back to Suzuki or another company nominated by the Japanese giant automaker. While it may seem that the court favoured Suzuki in its decision, it must be noted that VW’s assertion of breach of contract has also been upheld, meaning Suzuki may have to pay some damages. In fact, VW can expect substantial profits from the sale because of the sudden rise in Suzuki shares following the court decision.
Suzuki Chairman Mr. Osamu Suzuki expressed relief at the termination of the dispute. The company is not seeking partners in the near future but is clearly not willing to work with VW again as Mr. Osamu Suzuki is quoted to have said “You don’t marry someone who you’ve divorced”.