SUBANG JAYA: The international arbitrators under the auspices of the Singapore International Arbitration Centre have upheld Proton Holdings Bhd's subsidiary Proton Automobiles (China) Ltd's (PAC) 2006 termination of the joint venture contract dated June 2002 with Goldstar Heavy Industrial Co Ltd. In a statement today, Proton said the final award was delivered by the arbitral tribunal on Jan 12, 2010.

The Malaysian carmaker said the tribunal found that PAC was lawfully entitled to terminate the contract as the JV company did not carry out any business activities from the time of its incorporation in 2002 until the termination. The JV company had failed to obtain a manufacturing licence to manufacture whole vehicles.

Proton said the tribunal also found that PAC had acted in good faith during the course of the JV by giving Goldstar repeated extensions of time and opportunities over a period of four years to obtain the licence from the Chinese authorities.

"With this decision, Proton now looks forward to focus on its efforts to expand its business in China. It is expecting an improvement in its China sales via its collaborative partner Zhejiang Youngman Passenger Car Group Co Ltd (formerly known as Youngman Automobile Sales Co Ltd)," it said.