M&M's US entry hangs on arbitration later this year

Despite dismissal of legal suits filed against it by Global Vehicles, Mahindra & Mahindra's (M&M) plan to enter the US market will be further delayed till the outcome of an arbitration process in London later this year.

"Mahindra continues to believe Global Vehicles' claims in the arbitration are groundless and looks forward to presenting its defenses in the arbitration in London later this year," M&M said in a statement on its website.

When contacted, M&M President (Auto and Farm Equipment) Pawan Goenka declined to comment on the possible dates for entering the US market.

"On US, I cannot say anything beyond what is on our website," he told PTI.

Last week, M&M had said all US litigations filed against it by Global Vehicles (GV), its erstwhile sole American distributor, have been dismissed.

"On January 13, 2011, an arbitral tribunal in London issued an award confirming that the tribunal has exclusive jurisdiction to resolve all disputes relating to Mahindra and Global Vehicles' relationship, and it has directed GV to stop all current litigation and not file any further litigation against Mahindra relating to the parties' current dispute," the statement said.

Subsequently, GV filed for dismissal of the suit against M&M that was initiated in June 2010 in the Georgia Federal Court, it said.

The issue will be taken up by the arbitration panel in London.

"Earlier, an 'administrative action' filed by GV against Mahindra in Georgia was dismissed. With these developments, GV has failed in its attempts to involve Mahindra in multiple litigations before courts and administrative agencies in the US," M&M said.

M&M has been locked in a lawsuit with its erstwhile sole US dealer GV over delay in launch of a diesel pick-up, which was first scheduled to enter the US market by 2009.

The utility vehicle maker has already missed three deadlines since, due to regulatory issues.

The Indian firm and US distributor entered into a pact on September 28, 2006, and Mahindra proposed to launch the pick-up truck in 2009.

However, the entry deadline was revised twice after that to beginning of last fiscal year and then to end of 2010, which too were missed.

As a result, GV had slapped a lawsuit against the company in June 2010 citing inordinate delays in the launch of the pick-up. However, terming GV's allegations as without merit, M&M countered the case with a dismiss motion in a US court.

GV had claimed to have made an overall investment of $103.5 million (about Rs 480 crore) along with franchisees.