MTA NSW Welcomes Arbitration As The Way Forward

The Motor Traders’ Association of NSW (MTA NSW) welcomes the facilitation conducted by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Bruce Billson, to broker a Memorandum of Understanding (MoU) between the Australian Automotive Dealer Association (AADA), Motor Traders’ Association of Australia (MTAA) and the Federal Chamber of Automotive Industries (FCAI), which is potentially transformational.

Supported by MTA NSW, the MoU allows for automotive disputes to be resolved via a voluntary binding arbitration pathway, which provides the mechanism, in the event of a dispute occurring, for ASBFEO to provide a suitable arbitrator from a panel of arbitrators which can include lawyers, senior counsel or even retired judges. 

In essence, the MoU applies to the relationship between Dealers and their OEMs and is designed to settle disputes between these two entities under the Franchising Code of Conduct.

Examples* of these can include:

Where a brand leaves the market with existing dealer agreements still applying
Where a brand substantially restructures its business model (a move to the agency for example) within the term of a dealer agreement 
Where a brand decreases its footprint within the term of the agreement (Honda reducing dealers in metropolitan areas for example).

The MoU promotes a limited mandatory arbitration proposal; a clear pathway for Dealer Representative Bodies and OEMs to settle disputes; encourages the adoption of standards for fair and reasonable relations between OEMs and Dealers; development of joint policy positions between AADA, MTAA and FCAI; establishing secretariats, working groups and regular meetings; and the review of the MoU every 2 years.   

Please find the following link to the Memorandum of Understanding between the AADA, MTAA, and the FCAI:  MoU 

*Source: GoAutoNews, 4 June 2022

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