Suzuki Motor Corporation: Notification Concerning Arbitration Award
August 30 2015 - 4:21AM
Business Wire
(This document is an English translation of the original
Japanese document. If there are any discrepancies between this
document and the original Japanese document, the original Japanese
document prevails.)
As Suzuki Motor Corporation (“Suzuki”) received an award on 29
August 2015 regarding the arbitration that Suzuki filed with the
International Court of Arbitration of the International Chamber of
Commerce on 24 November 2011, Suzuki informs you as follows:
Key highlights of the Tribunal’s verdict are;
- The Framework Agreement between
Volkswagen AG (“VW”) and Suzuki was validly terminated by Suzuki's
notice of termination dated 18 November 2011, such termination
being effective from 18 May 2012.
- Volkswagen AG must dispose of its
19.89% shareholding in Suzuki forthwith to Suzuki or its designee,
by a method to be reasonably determined by Suzuki.
- VW's counterclaims were partially
upheld and Suzuki was found in the breach of the Framework
Agreement. The remainder of VW's counterclaims and Suzuki's claims
were dismissed.
1. Outline of the Award
(i) Termination of Framework Agreement
The Tribunal found that the Framework Agreement was validly
terminated by Suzuki’s notice of termination dated 18 November 2011
mentioned above, such termination being effective from 18 May
2012.
(ii) Divestment of Shares in Suzuki
The Tribunal upheld Suzuki's claim regarding VW’s disposal of
its shares in Suzuki and ordered VW to divest forthwith those
shares to Suzuki or a third party designated by Suzuki using a
method which is reasonably determined by Suzuki.
(iii) Suzuki’s Breaches of Agreement
VW's counterclaims of Suzuki’s breach of the agreement were
partially upheld and the Tribunal indicated that the amount of
damages, if any, would be addressed in a further stage of the
arbitration proceedings.
Commenting on the award Mr. Osamu
Suzuki, Chairman of Suzuki, said:
“In accordance with Suzuki’s request, the arbitration award
concluded that the Framework Agreement with VW was terminated and
that VW must return its Suzuki shares. We are satisfied with this
conclusion.
Accordingly, we achieved our primary objective in bringing the
arbitration claim, namely the return of the Suzuki shares.
Now, all of the Suzuki Group will be united to strive for
Suzuki’s further development.”
2. History leading up to Request
for Arbitration
Suzuki requested VW to terminate their business and capital
alliance through amicable negotiation. However, as VW failed to
respond to Suzuki’s request, Suzuki served on 18 November 2011 a
notice of termination of the Framework Agreement that was made with
VW. Further, on 24 November 2011, based on the parties’ agreement,
Suzuki filed a request for arbitration in London, which is the
place of arbitration, with the International Court of Arbitration
of the International Chamber of Commerce. Thereafter, a tribunal
was organized in accordance with the ICC arbitration rules. Suzuki
made certain requests to the Tribunal, including asking the
Tribunal to make a declaration that the Framework Agreement was
validly terminated and order VW to divest its shares in Suzuki to
Suzuki or a third party designated by Suzuki pursuant to that
termination.
On the other hand, VW also requested the Tribunal to dismiss all
of Suzuki’s claims and uphold VW’s claims including its claim that
Suzuki breached the Framework Agreement.
3. Outlook for the Future
Suzuki will closely review the award and will take appropriate
measures.
As announced on 9 December 2014, Suzuki intends to acquire the
shares in Suzuki from VW through the ToSTNeT-3 system. Suzuki will
disclose details regarding the acquisition of these shares as soon
as they are determined.
As a result of VW disposing of its shares in Suzuki, there will
be a change in our largest shareholder, which is also a major
shareholder.
At this stage, Suzuki does not foresee any need to amend its
forecast of consolidated results for the fiscal year ending March
31, 2016, however, if any matters that need to be disclosed occur,
such matter will be promptly disclosed.
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version on businesswire.com: http://www.businesswire.com/news/home/20150830005032/en/
Bell PottingerDavid BeckCharlie HarrisonTom Cahn+44 203 772
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