Grab loses Vietnam lawsuit, ordered to pay Vinasun over $200K

The verdict ends an 18-month-long legal battle between Grab and Vietnamese taxi operator Vinasun.

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Grab loses Vietnam lawsuit, ordered to pay Vinasun over $200K

The 18-month-long legal battle between Southeast Asia’s ride-hailing giant Grab and Vietnam’s largest taxi company Vietnam Sun Corp (Vinasun) concluded today with the court ordering Grab to pay the local taxi operator Vnd4.8 billion (US$206,985), according to reports and a statement from Grab.

The two companies have been locked in legal battle since June 2017, when Vinasun accused Grab of causing operating losses to the Vietnamese firm when the latter allegedly abused a pilot programme by Vietnam’s Ministry of Transport by operating as a taxi company.

Vinasun sought nearly US$1.8 million as compensation, which it claimed was Grab’s portion of the US$3.25 million in losses that it suffered in 2016 and the first half of 2017. Grab offered to invest US2.78 million in Vinasun but the Vietnamese taxi operator refused the offer, prompting the court to resume the hearing.

According to a Reuters report, the court on Friday found Grab guilty of violating Vietnamese regulations because it operates as a taxi company and not just as a technology firm. Grab insisted it was not operating as a taxi company.

But while the court ruled in favour of Vinasun, it only awarded just over 11% of the compensation that the local taxi operator was seeking because the judge said Grab was not the only factor behind that losses.

Grab said it will be appealing and seeking a reversal of the first instance decision of the court.  In a statement, it said it is preparing to launch a defamation lawsuit against Vinasun and all other parties that have “colluded” with Vinasun if there is no retraction of the “baseless allegations” made towards Grab over the past months.

Grab Vietnam Country Head Jerry Lim said that the first instance verdict of the People’s Court of Ho Chi Minh City is an “extremely unfortunate” for technology and foreign investment in Vietnam.

The verdict, he said, clearly sends the “negative message” internationally and domestically to technology companies and entrepreneurs who want to invest and unleash the potential of Vietnam’s thriving and vibrant tech ecosystem. He also claimed that the verdict would set a bad precedent for other traditional companies by inadvertently encouraging them to sue their way out of competition, instead of innovating their technology.

Lim added that the verdict contradicts the Vietnamese government’s pursuit of its Industry 4.0 and digital economy ambitions, describing Vinasun’s move as an anti-competitive tactic.

“This is a defeat and giant step backwards for Vietnam’s hardworking entrepreneurs and tech talents who truly want to improve people’s lives using technological innovation,” Lim stressed.

Vinasun has not issued a statement regarding the verdict as of this posting.

Editor: Ben Jiang