HAMAMATSU, Japan--(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.