Nissan's sales partner drags it to court over pact termination

Hover Automotive India (HAI), the firm that sold and distributed Nissan cars in the country, has dragged the Japanese auto maker to court over termination of their agreement.
"HAI has already exercised legal options available to it to have the purported termination established as invalid and wrongful," the company said in a public notice.
It, however, did not disclose in which court the case has been filed. Spokesperson of HAI also declined to disclose, saying the company cannot comment beyond what has been put up in the public notice at the moment.
The development followed the announcement by Nissan on February 14 that it had terminated its sales, marketing and distribution agreement with HAI.

Disputing the termination, HAI said it "has a binding legal distribution agreement with Nissan that establishes the long term distribution rights of HAI in India."
When contacted for comments, a Nissan Motor India spokesperson declined to comment saying the company stood by its earlier statement.

Stating that it considers the "purported termination as invalid and ineffective", HAI cautioned persons having relationship with it against acting on the basis of Nissan's notice "regarding the alleged termination of distribution agreement, aimed at inducing a breach or termination of any relationship with HAI, and will need to consider the cost, damages, consequences and legal proceedings..."

Nissan, which currently sells models such as the Sunny, Micra and Terrano in India, said in November that its Datsun vehicles slated for launch next month would be sold directly through Nissan Motor in India and not through Hover.
The Japanese auto firm had said Datsun will work primarily with existing dealers, appointed by Hover, which have demonstrated high capabilities and commitment to the Nissan brand.
Nissan, which started in India in 2005, had appointed Hover as its national sales company, acting as the sole and exclusive distributor for managing the marketing, sales, after-sales service and training & dealer development functions for the entire Indian territory.

However, in the recent past, their relationship was under strain with dealers unhappy as poor sales hurt their service and spare parts business.