Western Digital announced it plans to taje Toshiba to the International Court of Arbitration in San Francisco to stop the sale of its jointly operated memory-chip business without its consent.
When Western Digital bought SanDisk last year, it acquired control of half of Toshiba’s main semiconductor. Since then, Toshiba suffered hugh financial losses after its U.S. subsidiary, Westinghouse Electric, filed for bankruptcy. As a result, Toshiba transferred ownership of the joint venture assets held with Western Digital into the newly formed Toshiba Memory with the intent of selling the unit to the highest bidder.
WD CEO, Steve Milligan, said the the following in statement:
Toshiba’s attempt to spin out its joint venture interests into an affiliate and then sell that affiliate is explicitly prohibited without SanDisk’s consent. Seeking relief through mandatory arbitration was not our first choice in trying to resolve this matter. However, all of our other efforts to achieve a resolution to date have been unsuccessful, and so we believe legal action is now a necessary next step.
A three-person panel in San Francisco will hear the arbitration under the rules of the International Chamber of Commerce. Toshiba has 30 days to respond to the request for arbitration
