Middle East Aston Martin Sues Aston Martin Lagonda UK for $50 Million

Middle East Aston Martin Sues Aston Martin Lagonda UK for $50 Million

DUBAI, United Arab Emirates — British luxury car maker Aston Martin Lagonda Ltd. UK is being sued for $50 million by its distributor in Dubai, Middle East Aston Martin, for breach of contract.

The lawsuit contends the strained relationship between Middle East Aston Martin (MEAM), the exclusive distributor of Aston Martin cars in the region, and the parent company to which Ford sold the bulk of the company a year ago is due “to the entrenched interests of its majority shareholder, the Kuwaiti investment group DAR, and their intention to refinance its stake in the company which had been purchased in March 2007, allegedly for an overprized rate.”

Ford sold most of Aston Martin — $848 million worth to Kuwaiti investment groups — Investment Dar and Adeem Investment Co. — led by David Richards, who heads the British racing firm Prodrive, and Aston Martin collector John Sinders. Ford retained a $77 million stake in the British luxury marque.

According to the claim, MEAM is an independent company established under United Arab Emirates law in 2003 for exclusive distribution rights for cars manufactured by Aston Martin Lagonda in the Middle Eastern region.

Lawyers from the firm of Fichte & Co Legal Consultancy in Dubai claim in the suit that when the MEAM was created in 2003, it cleared existing financial obligations of Aston Martin Lagonda in the Middle East and invested in improving the British marque’s sales numbers and image in the region — a region of great wealth and where luxury brands are growing extremely popular.

Specifically, the law firm noted, the company resolved an existing legal dispute with the previous distributor of Aston Martin in the Middle East. The claim contends the relationship with Aston Martin Lagonda and significant investment was for an initial five-year period with a rewewal option of equal length. However, toward the end of the initial five-year period, the lawsuit contends, Aston Martin Lagonda rejected the renewal of the distribution rights with MEAM.

MEAM states in the lawsuit a settlement of $50 Million will cover its investment per the agreement, "which has been unfairly terminated and also the future revenues that will be lost due to the early termination of the agreement."
 

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.