The long-running dispute between Indian carmaker Mahindra & Mahindra and estranged US distributor Global Vehicles USA may have reached its conclusion with the announcement that the UK arbitration panel tasked with resolving the conflict has ruled that Mahindra was not in violation of the contract for distribution it had with Global Vehicles as the latter had claimed.
The dispute has been running for two years but the story goes back to 2006 when Mahindra and Global Vehicles USA first announced that they would introduce a compact diesel pickup to the US market. However, the introduction of the T20/T40 compact trucks was hampered with delays leading up to 2010, in part to do with the vehicles meeting regulatory compliance in the US. Then, just as the vehicle was awaiting approval by the Environmental Protection Agency, Mahindra declared that its original contract with Global Vehicles had ended.
Refuting this, Global Vehicles USA responded by launching a lawsuit against Mahindra, in July 2010, alleging that the carmaker had twice missed deadlines to launch its pickups in the US despite Global Vehicles having spent nearly $35m in signing up around 350 dealers. The initial federal case was begun in Atlanta, Georgia and sought to ban Mahindra selling its vehicles through any other dealer in the US.
In September that year Mahindra said it would "make other arrangements for distribution" to dealers in the US and rejected what it called an "invalid order" for pick-up trucks from its "former distributor".
Global Vehicles countered that such an attempted termination was invalid under applicable laws of the US and the State of Georgia, something it said Mahindra was disregarding.
However, in February last year, Global Vehicles' CEO John Perez withdrew the US lawsuit to allow a British arbitration panel to decide whether his company will distribute Mahindra's pick-ups in the US.
One year on and it appears that Perez has failed to convince that arbitration panel that his original agreement with Mahindra should be honoured. According to Mahindra the arbitration panel agreed that the original contract had expired and that Mahindra had not violated the terms of the contract or any US laws.
It now remains to be seen whether Mahindra will follow up on the 'other arrangements for distribution' it claimed it make in 2010.
Neither Mahindra nor Global Vehicles were willing to comment on the announcement.
