Goldstar to sue Proton for breach of contract

Shanghai, May 8 (Gasgoo.com) Chinese company Goldstar Heavy Industrial Co will begin a lawsuit in China against Malaysian automaker Proton for an alleged breach of contract case, reported the Star newspaper on Thursday.

"We are very confident (that we will win the case) based on the figures and documents we have provided to the arbitration court," Yan Baisong, a lawyer representing Goldstar told StarBiz in an interview recently.

Two companies had already met at the Singapore International Arbitration Centre last month. Yang said regardless of the verdict by Singapore court, the suit would still be heard in China.

Goldstar, Proton's former joint-venture partner in China to manufacture cars, is seeking about one billion yuan ($147 million) in compensation for alleged breach of contract.

Under the JV proposal that was signed in 2002, a plant was to be set up in Dongguan to produce cars in China. But Proton said Goldstar had failed to obtain a license for the joint venture within three years' time, frustrating Proton's initiatives to start manufacturing cars in China.

However, according to Goldstar, Proton wanted to form an agreement with another Chinese company, Jinhua Youngman Automobile Manufacturing Co Ltd., with a target of selling 30,000 units of Proton's GEN.2, rebranded as the EuropeStar in China.

Sources said earlier that the Chinese company had bought land for the proposed plant.

"My client will sue Youngman too," Yan said. Proton has declined to comment on the latest development.

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