GTY lawsuit sent back to district court

ERJ staff report (R&PN)

San Francisco, California -- An appeals court has sent Toyo Tire Holdings of Americas Inc.'s lawsuit against its partners in GTY Tire Co. back to district court.

The Ninth Circuit U.S. Court of Appeals ruled that the U.S. District Court for the Central District of California erred in denying Toyo's suit to enjoin Continental Tire the Americas L.L.C. and Yokohama Tire Corp. from terminating Toyo's status as a joint venture partner in GTY and ending the supply of tyres to Toyo from GTY.

The appeals court on June 17 ruled the district court based its Jan. 25 decision on the application of an incorrect legal standard, which resulted in an “abuse of discretion.” It remanded the case for the district court “to properly weigh the appropriate factors.”

The appeals court also ruled that it continues to have “subject matter jurisdiction” over the case despite the fact that the International Court of Arbitration in Geneva, Switzerland, has convened a panel to hear the case. The joint venture agreement among the three companies specified that they would take any disputes to the arbitration court.

The court ruled it continues to have jurisdiction since the arbitrators have yet to rule on Toyo's request of injunctive relief and that Toyo “at this time still has need for interim relief.”

The case centers on Conti's and Yokohama's assertion that Toyo Tire Holdings' parent company, Toyo Tire & Rubber Co. Ltd., is involved in a technology exchange with Bridgestone Corp., a major competitor, which they consider grounds for terminating Toyo's participation in the GTY venture

From Rubber & Plastics News (A Crain publication)