Legal dispute with Volkswagen: Partial success for Prevent – but in the long term, it looks bleak for the VW rebels

05/14/2018

Litigation with Volkswagen Partial success for Prevent – but in the long term, it looks bleak for the VW rebels

DPA

VW has to take a part of the components of ES cast iron. However, the district court fell far short of the demands of the Prevent subsidiary

In the legal dispute between Prevent subsidiary ES Automobilguss Schönheide and VW, the automotive supplier was only able to achieve a partial success. The district court of Leipzig committed Volkswagen in a preliminary injunction to remove 30 percent of the previous scope of the components manufactured by ES Guss. This rule applies until 26 April 2019 – at the latest until the main issue at the district court of Chemnitz a decision has been made. This informed the district court Leipzig on Friday.

With the decision, the board was far behind the application of the based in the Erzgebirgskreis ES cast iron, which had demanded an exclusive supply of gear parts to VW until 2022.

Background of the dispute are from VW contracts canceled in March 2016. In the opinion of Volkswagen, these had only come about through blackmail. At that time, Prevent had stopped production lines with a delivery boycott at the car company.

ES Guss employs 300 people and manufactures gearboxes. Companies from the Prevent group of the Bosnian investor family Hastor are also arguing bitterly about delivery and contract terms with other car makers.

In its decision, the board followed a settlement proposal submitted by VW at its meeting on April 26. However, this had been rejected by ES Guss, as the court further communicated. Both parties may appeal against the judgment at the Dresden Higher Regional Court.

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The decision shows that the court in principle considers the claims of ES Guss justified, a spokesman for the company said. However, ES Guss could not be satisfied with the regulation, which obliges Volkswagen to first reduce its delivery volume by 30 percent to one year. “We expect Volkswagen to immediately take back parts of the ES Guss, and at the same time we will thoroughly analyze the decision and its impact on the site,” the spokesman said.

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