Hyundai Motor Company is seeking to recover more than $40 million from Bering Truck Corporation and Bering Truck Distribution for alleged failure to pay Hyundai for commercial trucks manufactured to Bering specifications
in Korea and shipped for sale by Bering in the United States.
The dispute will be resolved through a binding arbitration process that is currently under way in Toronto, Canada.
Hyundai and Bering entered into a distribution agreement in March 1998 under which Hyundai manufactured trucks according to specifications provided by Bering. Bering was to import those trucks into the United States and sell them through its dealers. "Beginning in late 1999, Bering failed to pay Hyundai for several truck shipments," said Stephen Kitson, a spokesman from Hyundai.
In the following months, Hyundai and Bering negotiated a series of agreements allowing Bering additional time to generate funds to pay Hyundai in installments, according to the Korean company.
"Despite repeatedly promising in writing to pay all amounts owing, Bering failed to pay Hyundai as agreed, while at the same time keeping the proceeds from the trucks," reports Kitson. As a consequence, in November 2000, Hyundai terminated the distribution agreement.
Bering, however, claims that Hyundai terminated the distribution agreement because of its joint venture with truck and car manufacturing giant DaimlerChrysler. They filed suit against Hyundai and DaimlerChrysler in June, alleging antitrust violations. Hyundai strenuously denies this claim.