Goldstar versus Proton


Accusation: Proton is being sued for alleged breach of contract by its former Chinese joint-venture partner Goldstar Heavy Industrial Co. Ltd.

Date: December 2008.
Court: Dongguan Intermediate People's Court, China.
Claim: Goldstar is seeking about one billion yuan (US$ 147 million) in compensation.
(Under joint-venture proposal that was signed in 2002, a plant was to be set up in Dongguan to produce Proton cars. Goldstar failed to obtain a license for the joint venture within three years'time. In 2006 Proton signed an agreement with another Chinese company, Youngman.)
Judgement: parties agreed to arbitrate before the Singapore International Arbitration Centre in April 2009.

Date: January 2010/ July 2010.
Court: Singapore International Arbitration Centre
Judgment: Proton had acted in good faith during the course of the joint-venture by giving Goldstar repeated extensions of time and opportunities over four years to obtain the manufacturing licence from the Chinese authorities. Goldstar had to pay Proton legal costs and the cost of arbitration totalling S$655,056.33.
Outcome: Goldstar lost.