Mahindra’s request to the Atlanta court for dismissing the dealers’ lawsuit has been met with disappointment. The U.S. District Court Judge has declined Mahindra’s appeal and consented the dealers to proceed with the lawsuit. “The plaintiffs have alleged facts that allow a reasonable person to infer that Mahindra USA was involved in a plan to deceive the dealers,” the ruling said.
The five dealers from New Hampshire, Florida, California, New Jersey and Washington had filed a lawsuit in 2012 against Mahindra and Mahindra for misrepresentation and conspiracy. The dealers stated that Mahindra had misled them into believing that manufacturer was planning to create a new U.S. Truck brand.
Mahindra had tied up with Global Vehicles, USA- a private distributor for supply of diesel pickups. The project failed to take off with Mahindra trying to obtain the U.S. regulatory approval for its vehicles. With no positive signs coming out, the dealership agreement was abruptly terminated in 2010 and dealers who had paid for the dealership as early as 2004 were left with unopened showrooms and claimed to have lost investments.
Though earlier two Court decisions have been in Mahindra’s favor- one being the Missouri District Court dismissing a case filed by a dealer against Mahindra on grounds that the dealer had contracted with Global Vehicles and not Mahindra. The second case happened when an independent arbitration panel in London also dismissed U.S. claims against Mahindra brought by Global Vehicles. But this time the tide seems to have taken a different course.
In the present scenario, Global Vehicles has not been included in the lawsuit and its a face-off legal tussle between the parties. Post the Atlanta ruling other Mahindra dealers have also expressed a desire to join the suit which spells more trouble for the Indian utility vehicle manufacturer.