Proton Goldstar joint-ventrure termination valid and legal

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 17 June 2002 with Goldstar Heavy Industrial Co Ltd [Goldstar] in 2006. PAC is a subsidiary of Perusahaan Otomobil Nasional Sdn Bhd. The Final Award was delivered by the arbitral tribunal on 12 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 Licence to manufacture whole 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 period of 4 years to obtain the said Manufacturing Licence from the Chinese authorities. With this decision, PROTON now looks forward to focus on its efforts to 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.).