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NEW YORK A U.S. judge on Tuesday said Alstom SA may ask an independent accounting firm to resolve a
dispute over the French company’s $800 million purchase of
General Electric Co’s train-signaling business, and
rejected GE’s bid for arbitration.
U.S. District Judge Jesse Furman in Manhattan said the “plain language” of the November 2014 sales contract justified
letting Deloitte Touche Tohmatsu handle the matter first, rather
than arbitrators from the International Chamber of Commerce.
Furman nonetheless said his decision was not a “back door”
through which Deloitte could resolve non-accounting matters.
He said that while GE conceded that Deloitte should decide
some issues, it remained free to argue that other issues should
Alstom had sued GE last May, accusing the Boston-based
conglomerate of breach of contract for refusing to let Deloitte
decide whether the purchase price should be adjusted up or down
to account for working capital and net debt.
A GE spokeswoman had no immediate comment.
In court papers GE had accused Alstom of avoiding
arbitration in an attempt to “second-guess” its business
decisions, and obtain an “after-the-fact discount.”
The train-signaling transaction closed in November 2015, on
the same day that GE bought Alstom’s energy business for an
adjusted 9.7 billion euros ($10.2 billion).
GE has been repositioning itself around industrial units
such as energy and aviation, while turning away from other
businesses including finance and home appliances.
The case is Alstom et al v. General Electric Co, U.S.
District Court, Southern District of New York, No. 16-03568. (1 euro = US$1.055)
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