Western Digital asked a court in California for an order blocking the sale of the chip unit of Toshiba, its partner in a manufacturing joint venture.
Several of WD's SanDisk subsidiaries have sought preliminary injunctive relief in the Superior Court of California for the County of San Francisco preventing Toshiba from transferring its three NAND flash-memory joint ventures operated with Western Digital until the request of the SanDisk subsidiaries for injunctive relief in arbitration is decided by the arbitral tribunal.
Steve Milligan, chief executive officer of Western Digital, stated, "Western Digital has been working tirelessly to reach an agreement that is beneficial to all stakeholders. Toshiba Corporation's attempts to circumvent our contractual rights have left us with no choice but to take this action. It is our concern that, left unchecked, Toshiba would pursue a course that clearly violates these rights and also runs decidedly counter to the best interests of the JVs and also to the hard working people at Toshiba Corporation's NAND Flash business in Japan. Western Digital's desire to work collaboratively with Toshiba for the benefit of the JVs and Japan is stronger than ever, and we will continue to pursue a solution that is in the best interests of all parties."
"We cannot comment as we have not yet received the complaint," said Kaori Hiraki, a spokeswoman for Toshiba. "We are proceeding with selecting the preferred bidder by the second half of June, and will seek to close the definitive agreement by June 28."
Western Digital claims that the anti-transfer provisions of the relevant agreements between Toshiba and SanDisk, which govern their NAND flash memory joint ventures, "are unambiguous and explicitly require that Toshiba obtain SanDisk's consent prior to any transfer of JV interests."
Western Digital says it has worked with both Toshiba and the Japanese government to develop a solution that is in the best interests of all parties, but Toshiba "has continued to try to invent ways to circumvent Western Digital's bargained-for consent rights under the JV agreements."
"As a result, we have been left with no choice but to take further steps to ensure that Toshiba does not unilaterally pursue a course of action that violates our clear contractual rights - one that would also be to the detriment of the JVs and Japan at large," WD said.
On May 14, 2017, Western Digital announced that several of its SanDisk subsidiaries filed a Request for Arbitration with the ICC International Court of Arbitration related to the three NAND flash-memory joint ventures operated with Toshiba, and Western Digital is moving forward with the arbitration.