Suzuki take Volkswagen to court

In the ongoing spat between Suzuki and Volkswagen, Suzuki has revealed it is to take VW to the ICC International Court of Arbitration in London to recover its shares.

The partnership between Volkswagen and Suzuki promised so much.

VW wanted an easy way in to the car market in India – where Suzuki is very strong – and in return Suzuki wanted access to the sort of technology – hybrid and EV – it couldn’t really afford to develop independently. And all looked rosy when VW took a near 20 per cent stake in Suzuki in 2009

But things started to go a bit awry when VW insensitively referred to Suzuki as an ‘associate’, where it could pull all the right strings, in its annual report. Never a good idea to undermine the honour of the Japanese.

As a result, back in September, Suzuki boss Osamu Suzuki said that VW and Suzuki were no longer speaking terms, which lead VW to demand that Suzuki unravel an agreement with Fiat to use its engines – a breach of the VW/Suzuki agreement, according to VW.

The next instalment in this spat saw Suzuki issue legal notice to VW to unravel their agreement and sell the Suzuki shares they hold back to Suzuki. But as that hasn’t happened Suzuki are now taking VW to the ICC International Court of Arbitration in London on 24th November to get a legal ruling on the agreement.

Suzuki has issued a statement which says:

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.

VW’s response to this has been to state that Suzuki’s actions are without foundation and that it intends to keep its shares.

All that’s actually certain is that VW will have to find another route in to the Indian car market, and that Suzuki will have to find another source for hybrid and EV tech.

Because it looks like hell will freeze over before VW and Suzuki sort out this mess.