Dina is claiming damages of $110 million because of the unilateral cancellation of a multi-year contract to supply vehicles to Western Star. Both companies had signed the contract in September 1999. The contract was cancelled after Freightliner bought Western Star earlier this year.
Dina will seek legal recourse to claim breach of contract because the purchase orders were initially suspended and later cancelled. The $110 million lawsuit also embodies claims for the premature and unilateral cancellation of the contract, outstanding payments due for vehicles sold to Western Star, payment for damages resulting from the breach of contract, loss of interest on corporate capital, as well as arbitration and legal costs associated with the legal action.
Dina's Legal Director has informed the Secretary of the ICC of the charges against Western Star, and expects to receive a response within 30 days of the receipt of the document. When the ICC has made a determination as to which parts of the overall claim fall within its jurisdiction, arbitrators will be appointed. Both companies will have 30 days to agree upon the designation of a third arbitrator, who should be of a different nationality and must be approved by the ICC. The arbitration process may last between 8 to 12 months. The final decision is not subject to appeal, and the timing of the settlement will be binding upon both parties.
Meanwhile, the company says that once the exclusive rights with Western Star have expired (60 days following cancellation of the contract), Dina will seek new opportunities tocontinue exporting its medium-duty HTQ vehicles to the United States.