Legal experts have urged the government that an out-of-court settlement with Suzuki Motor Cowould be a better option in the ongoing power struggle in Maruti Udyog Ltd.
They have said that as the arbitration in the International Court of Arbitration is a lengthy and expensive affair, the government is likely to be the loser.
Legal experts have hinted that the problems in taking on SMC and have said that an out-of-court settlement is a much better option for MUL,say sources
They said that some mandarins in the industry ministry and some politicians are bent on making the faceoff with Suzuki a prestige matter. Moreover, cases in ICA could prove to be expensive for both the parties. It is believed that the government will have to pay approximately 25 pounds per hour to its arbitrator- Y V Chandrachud - for argument purposes apart from other costs.
The government had earlier rejected SMCs plea that it had contravened key clauses of the 1982 shareholders agreement by appointing RSSLN Bhaskarudu.
Heavy Industries and petroleum secretary and MUL chairman Probir Sengupta had shot off a letter to Suzuki saying that the specific clause in the old agreement which calls for mutual discussions and consultation for appointing the MD has been superseded by the new 1992 agreement under which the Government has the right to appoint the managing director for five years from 1997 without any consultation.
