NEW YORK (Reuters) - A U.S. judge on Tuesday said Alstom SA (ALSO.PA) may ask an independent accounting firm to resolve a dispute over the French company’s $800 million (£657 million) purchase of General Electric Co’s (GE.N) train-signalling 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 be arbitrated.
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-signalling transaction closed in November 2015, on the same day that GE bought Alstom’s energy business for an adjusted 9.7 billion euros (£8.4 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.
Reporting by Jonathan Stempel in New York; Editing by Alan Crosby