The Paris-based International Court of Arbitration is unlikely to settle the Suzuki Motor Co-Government of India imbroglio within the 60-days fast-track arbitration period requested by the Japanese company.
Suzukis request is unviable due to the absence of any such clause in either the 1982 or the 1992 shareholders agreement between the two partners, as well as the governments refusal to accept Suzukis 60-days request, according to ICA chairman Robert Briner.
Briner told Business Standard that a time limit for arbitration can only be evoked by a disputing party if it was specifically laid down in the shareholders agreement signed by the two partners when they originally entered into the partnership.
Alternatively, arbitration proceedings can take place on a fast-track basis only if the two disputing partners agree to a mutually acceptable schedule. We cannot impose any time restriction unless it is written down in the contract or agreed upon by the two disputing parties, explained Briner.
Thus, the current face-off between Suzuki Motor and the government is unlikely to be resolved through a 60-day arbitration. On average, general arbitration cases at the ICC take between one and two years to resolve.
With long-drawn-out arbitration looming ahead, important MUL projects, including product upgradation, fresh investment plans, and other major managerial decisions are expected to be thrown off-track.
Again, the cost of international arbitration may be too steep for MUL, which has been named as a party along with the government in all cases filed by Suzuki Motor. The cost of international arbitration could run into millions of dollars, which would be a severe drain on Marutis purse, said legal experts.
