Nitta reports lawsuit by partners in Gates Unitta Asia JV
Japanese group ‘categorically rejects’ claims of breaking stakeholder agreement in its long-term joint venture
Tokyo – Japanese group Nitta Corp. has ‘categorically rejected’ claims of breaking shareholder agreements in a long-term joint venture business with Gates Corp.
In a 20 Jan statement to the Tokyo Stock Exchange, Nitta said Gates Corp. and Gates Canada Inc. had filed a petition regarding Nitta’s practice as a shareholder in Gates Unitta Asia Co.
Nitta and Gates established Unitta Co., now Gates Unitta Asia Co., as a joint venture in Japan in 1971.
The partners have since established and expanded JVs in China, Singapore, India, Thailand and South Korea, for the manufacture of products such as toothed belts and pulleys.
In its filing, the Japanese group said the petitioners claim that Nitta is in violation of shareholder agreements between the JV partners as well as a technology-cooperation agreement.
Nitta said it is facing demands to pay remedies, including payment of $458 million (€431 million) in damages and cancellation of the JV agreements.
In response, Nitta said it “categorically rejects” the claims of the petitioners, noting that they were “entirely inconsistent with our understanding of the circumstances.”
Nitta plans to provide “an appropriate fact-based response” during the course of the arbitration proceedings, which will be held in Denver, Colorado.
“In addition, we consider the growth and succession of each of the joint venture companies to be matters of the utmost importance, the filing continued.
Nitta, therefore, intends "to continue our unchanged cooperation in the business operations of each [JV] company.”