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Ford's hope of skirting arbitration payment dashed

The Michigan Supreme Court apparently changed its mind on listening to an appeal from the Ford Motor Company about a $22.6 million arbitration that was awarded to a software company over a breach of contract dispute.

The final decision by the high court, which initially agreed to accept the appeal and hear arguments during November, ends eight years of legal proceedings between the automaker and EnGenius Inc., based out of Livonia, Michigan. The court released a statement that states it no longer thought that questions Ford was raising should continue to be reviewed by a court.

A spokeswoman for Ford highlighted the fact the company thought it had a solid argument to throw out the arbitration and that the company will assess what further legal action it can take in the case.

The business litigation initially began in 2003 when EnGenius sued Ford for allegedly trying to put it out of business so Ford could lay claim to a testing system that inspected every component of a car before it left the factory. Ford enlisted the software company's help to develop the system, in which they sank millions of dollars into. Once EnGenius developed the system, company officials allege that Ford withheld vendor payments and tried to put EnGenius out of business.

Ford pushed the case into binding arbitration and lost. Ford also lost its appeal with the Michigan Court of Appeals.

A lawyer for EnGenius said if Ford remains stubborn and does not pay the $22.6 million, they will go through the courts to try to collect on a $28.5 million bond Ford had to post to appeal the case.

Source: Detroit Free Press, "Michigan Supreme Court tosses Ford appeal in $22.6 million contract dispute," David Ashenfelter, Nov. 29, 2011

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