Mahindra Reva to settle issues with Bannon Automotive, post lawsuit

Mahindra Reva Electric Vehicle Pvt Ltd, (MREV), world's biggest electric car maker is trying to resolve its differences with Bannon Automotive. On 20th December, the New York auto company filed a suit against MREV for violating the deal of sharing the technology for the building of the electric car and selling it in the US auto markets and also in the Caribbean Islands.

R Chandramouli, the Chief of Operations in MREV revealed that Mahindra Reva has come to know about the case recently but no formal documentation has been received from Bannon Automotive. He also said that when the company will receive any formal communication it is only then that it would revert.

As per the joint venture between Chetan Maini, the founder of REVA and William F Harley III, the owner and controller of the Bannon Holdings, the Indian counterpart had to provide engineering designs and intellectual property for developing the present and the future car models which includes Reva i, Reva NXR and the Reva NXG. In the venture Reva holds the share of 52.5 per cent and Bannon owned 47.5 per cent of the stake.

In May 2010, Mahindra & Mahindra India took 55.2 per cent stake in the electric car company Reva as a result of which Bannon Automotive has filed a lawsuit of $ 25 million against Mahindra Reva for not keeping up with the agreement. Bannon further said that the Indian counterpart is planning extensively to produce as well as market the electric cars on its own in America and is also looking forward to consider a third party for licensing. Bannon also said that MREV did not provide its support for setting up a manufacturing unit and also sharing technologies for the Reva NXG and four seator Reva NXR for America. The New York based company has filed a permanent injunction against the Mahindra Reva and if it is proved, the company will be barred from the production and sale of the electric cars in the US auto market.

Flipping back the ex-files, Mahindra earlier has faced another lawsuit in US from the Global Vehicle USA Inc (GV). The case against Mahindra was filed in June 2010 which stated that the Indian company delayed in introducing the pick-up trucks in the US auto market. While M&M stated that the delay in launch is because of the regulatory issues. M&M in 2006, in the pact with Global Vehicles appointed the company as a sole distributor. And as per the pact, by 2009 the pickup trucks were to be launched but the Indian auto giant has already missed two deadlines. The delay issues included road worthiness rules and emission norms. The pick up truck were supposed to be launched by the end of 2010 but the company has yet again missed the deadline.

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