Suzuki Motor Corp. and Volkswagen AG must terminate their alliance based on a decision from an international arbitrator. The German car company must sell its 19.9% stake in the Japanese company in order to meet the ruling.
Suzuki started proceedings against the company four years ago, claiming that its alliance had ended in May 2012.
The arbitrator also ruled that Suzuki had breached the alliance agreement. Any possible damages would likely be addressed in future arbitration proceedings, Suzuki said.
The company’s entered into an agreement in 2009, at which time Volkswagen purchased its 19.9% stake for approximately $1.9 billion. The two company’s almost immediately faced off over cultural differences. Suzuki soon after filed for international arbitration, asking Volkswagen to sell back the stake.
“We welcome the clarity created by this ruling,” Volkswagen said in a statement.
“Suzuki is satisfied with this conclusion. Through this decision, Suzuki was able to achieve its main objective in initiating the arbitration procedures,” Suzuki Chairman Osamu Suzuki added.
No further details are available at this time.