Sale of Bombardier Transportation | Accounts to settle between Bombardier and Alstom

The sale of Bombardier’s rail division to Alstom is at the heart of a commercial dispute between the two companies. At the request of the French multinational, hostilities take place before the International Chamber of Commerce, where disputes seem to be settled out of sight.

Julien Arsenault
The Press

This dispute between the two companies is likely to “extend over several years”, according to a declaration published Monday, at the beginning of the evening, by the Quebec company. Bombardier and Alstom refused to explain what prompted the French multinational to seek arbitration with the international organization that allows companies to settle their accounts before a commercial tribunal made up of judges.

According to Bombardier, Alstom accuses it of having “certain contractual provisions” in the context of the transaction finalized on January 29, 2021. Its price had been revised to 3.6 billion US, down from 400 million US. The French giant limited itself to saying that the arbitration procedures were “confidential”.

“Bombardier has legitimate reasons to defend itself against Alstom’s claim and it intends to do so vigorously,” said the Quebec company.

When officially selling its rolling stock division, Bombardier had already indicated that it intended to challenge certain “adjustments” which had lowered the amount of the transaction. Bombardier Transportation’s performance had been undermined by major execution problems, prompting a revision of the price paid by Alstom.

In its annual report for the year ended December 31, Bombardier offered bank guarantees totaling US$396 million to Alstom. The first tranche (113 million US) aims to guarantee certain indemnities which are not specified.

The second (283 million US) aims to compensate Alstom if Bombardier Transport is the subject of financial claims. This former division of Bombardier has been the target of allegations of wrongdoing in the past.

It was not possible to know whether the dispute concerns these two provisions.