Proton’s termination of joint venture contract with Goldstar China lawful and valid

Published on February 12th, 2010

Proton recently announced that the international arbitrators, under the auspices of the Singapore International Arbitration Centre, upheld Proton Automobiles (China) Ltd’s (PAC) termination of the Joint Venture Contract dated June 2002 with Goldstar Heavy Industrial Co Ltd [Goldstar] in 2006.

PAC is a subsidiary of Perusahaan Otomobil Nasional Sdn Bhd, and it represents part of Proton’s interest and presence in the hugely lucrative automotive market and industry of The People’s Republic of China.

The Final Award was delivered by the arbitral tribunal quite recently in January 2010. The arbitral tribunal found that PAC was lawfully entitled to terminate the said Joint Venture Contract, as the Joint Venture Company (the JV Co) did not carry out any business activities from the time of its incorporation in 2002, until the termination of the Joint Venture Contract. The JV Co failed to obtain a Manufacturing License to manufacture whole, complete vehicles.


The arbitral tribunal also found that PAC had acted in good faith during the course of the joint venture by giving Goldstar repeated extensions of time and opportunities over a rather long period of 4 years to obtain the said Manufacturing Licence from the Chinese authorities, which Goldstar failed miserably at doing so.

With this decision said and done rightly so in PROTON’s favour, PROTON now looks forward to focus on its existing efforts to further expand its business in China. It is expecting an improvement in its China sales via its collaborative partner Zhejiang Youngman Passenger Car Group Co. Ltd. (formerly known as Youngman Automobile Sales Co Ltd.).

Trafficmagonline would like to take this opportunity to wish PROTON the best of luck for its efforts and initiative in penetrating and establishing itself as a popular, trusted and recognized automotive brand in the Chinese automotive market and industry. Trafficmagonline is confident that Proton will find and achieve success in China.

text: Azdee Amir  pix: Proton


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