Madras HC asks district court to dispose Leyland-Nissan dispute in two weeks

The order comes in an application filed by Renault-Nissan seeking stay of all proceedings in the district court

Madras High Court has directed the district court of Kancheepuram to dispose of the pending dispute between Ashok Leyland and Renault-Nissan regarding their light commercial vehicle joint venture in two weeks from receiving the order. The Court has also asked both the parties to maintain status quo till the district court issues the order.

The order comes in an application filed by Renault-Nissan automotive against Ashok Leyland-Nissan, the joint venture (JV) company, seeking stay of all proceedings in the district court pending constitution of arbitration.

When the matter came up on Tuesday, Justice K Ravichandra Baabu, without going into the merits of the matter, issued the order directing that the district court has to hear the matter and issue an order including on maintainability of the petition, in two weeks from receiving the order.

Nissan official said that the company do not want to respond since the matter is sub-judice.

It may be noted that the business relationship between Ashok Leyland and its JV partner Japanese auto major Nissan has turned sour of late, and the Chennai-based commercial vehicle major raising a series of allegations against its Japanese partner, and moving court for a legal remedy.

In 2007, Ashok Leyland and Nissan announced a JV to develop and manufacture LCVs under both the Ashok Leyland and Nissan brands, in the 2.5-7.5 tonne segment. The JV was named as Ashok Leyland-Nissan Vehicles, in which Ashok Leyland held 51%. However, the JV had a rough ride in the Indian market.

The partners have formed three companies include Ashok Leyland, Nissan Vehicles Pvt Ltd, the vehicle manufacturing company in which Ashok Leyland has 51% Nissan has 49% stake in, Nissan Ashok Leyland Powertrain Pvt Ltd, the powertrain manufacturing company owned 51% by Nissan and 49% by Ashok Leyland and Nissan Ashok Leyland Technologies Pvt Ltd, the technology development company owned 50:50 by the two partners