British court counts out U.S. Mahindra distributor
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A British arbitration panel has decided against the would-be American importer of Mahindra-brand Indian pickups, according to a document filed last week with the Bombay Stock Exchange.
Global Vehicles U.S.A. of Atlanta, which had signed up nearly 350 U.S. dealers to sell the Indian-made pickups, has failed to convince arbitration judges that its contract with Mahindra & Mahindra should be honored.
Whether the ruling closes the book on the long-running conflict between Global Vehicles and Mahindra remains to be seen. But the decision is certain to affect dealers around the United States who have signed franchise agreements and invested in dealership facilities through Global Vehicles rather than Mahindra.
Some franchised Mahindra dealers have been supporting Global Vehicles over the past year, forming a dealer action committee to raise funds for its legal fight.
According to a statement by Mahindra filed on the stock exchange, the panel unanimously concluded that the contract between Global Vehicles and Mahindra had expired and therefore Mahindra had not violated the terms of the contract or violated any U.S. laws.
John Perez, Global Vehicles CEO, declined to comment on the statement by Mahindra.
Strained relations
Perez has described strained business dealings with Mahindra over the past two years. The companies announced their intentions to introduce a compact, four-cylinder-powered clean-diesel pickup in 2006. But the project was marked with delays as U.S. dealers pressed for product changes and the Indian manufacturer prepared the vehicle to meet U.S. regulatory requirements.
Just before the new import was approved for U.S. roads by the EPA in 2010, Mahindra announced that its contract with Global Vehicles had ended. Mahindra maintained that Global Vehicles had allowed the contract to end. Global maintained that the manufacturer had unilaterally ended the agreement and claimed to still have distribution rights. It sought arbitration in London in accordance with their agreement.
Mahindra, a multi-line conglomerate, was barely known as an automaker outside of India in 2006 when Perez began attempting to import its rustic diesel pickups. But the company shows every sign of still being interested in entering the U.S. market.
New direction
Since its falling out with Perez, Mahindra has taken giant steps in a different direction. The Indian company now owns an interest in Korean automaker Ssangyong Motor Co., which has its own interest in entering the U.S. market.
Perez’s dealer body has been in limbo since the legal troubles unfolded in 2010, often complaining that they had no information about their fate. A group of Mahindra dealers filed suit against the Indian manufacturer on their own in U.S. District Court for the Eastern District of Missouri. But that court concluded earlier this month that Global was not the recognized agent for Mahindra in the United States and dismissed the lawsuit earlier this month.
Mahindra’s filing last week to the Bombay Stock Exchange also said that the British arbitration panel had ordered Global Vehicle to pay the court costs for the arbitration.
You can reach Lindsay Chappell at lchappell@crain.com.
