Vietnam court resumes Vinasun-Grab lawsuit hearing after failed arbitration

Vinasun’s lawsuit against Grab resumes after the Vietnamese taxi firm turned down Grab’s US$2.78-million investment offer.

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Vietnam court resumes Vinasun-Grab lawsuit hearing after failed arbitration

Hearings for a lawsuit filed by Vinasun, Vietnam’s largest taxi operator, against ride-hailing giant Grab have resumed after out-of-court negotiations that lasted nearly a month failed to result in a settlement, according to local media reports.

Vinasun filed the suit against Grab in June 2017, accusing the major Southeast Asian ride-hailing company of abusing a pilot programme by Vietnam’s Ministry of Transport, leading to operating losses for the Vietnamese firm. Grab countered that it cannot be blamed for Vinasun’s losses because it operates as a tech firm, not a taxi company.

During the court-approved negotiations that began earlier this month, Grab reportedly offered to buy a US$2.78 million stake in Vinasun, a proposal that Grab described as an investment activity. Vinasun said the offer was not “appropriate,” and is seeking nearly US$1.8 million as compensation. The taxi operator claims that Grab’s activities in Vietnam account for that portion of the US$3.25 million in losses that the company suffered in 2016 and the first half of 2017.

Vinasun has not issued an official statement since the resumption of hearings.

Referring to the failed acquisition offer, Grab released a statement saying Vinasun “chose to reject a win-win solution,” claiming that the investment would have helped the Vietnamese firm upgrade its technology and improve its operations. Grab also clarified that the acquisition offer does not suggest admission of damages “wrongfully claimed” by Vinasun, but is a purely commercial cooperation agreement.

When the trial began in February, Grab protested Vinasun’s valuation of losses and argued that it has been given equal opportunity in Vietnam to operate among other e-hailing apps. However, the latest draft of a Ministry of Transport decree indicates transit companies using vehicles with up to nine seats must be registered as taxi operators before they can apply ride-hailing technologies.

Responding to the draft, Grab sent a letter to Prime Minister Nguyen Xuan Phuc in October, saying that identifying Grab as a taxi firm would be “a step backwards from Industry 4.0.”

Truong Dinh Quy, deputy director-general of Vinasun, was quoted by Vietnam News Agency as saying that Grab’s app-based ride-hailing service has disrupted the taxi transport sector. He also claimed that Grab’s official status complicates matters of tax collection and social security for the firm’s local employees.

On November 30, the People’s Court of Ho Chi Minh City suspended the trial, allowing the litigants to enter negotiations for up to a month. Vinasun eventually abandoned the talks. Grab argues that since Vinasun is not open to amicable settlement, the case should be dismissed.

“We hope that the court case will come to a close so that all parties can stay fully focused on innovating and serving the best interests of the people of Vietnam. It is our hope that Vinasun. . . will see the light and set an example for other players in the industry by constantly innovating to remain relevant and competitive. . . and not take the easy way out through a lawsuit whilst maintaining the status quo,” Grab said.

Editor: Brady Ng