"SMC is Thursday commencing arbitration proceedings in London with the ICC International Court of Arbitration, in order to compel Volkswagen AG to dispose of its Suzuki shares to Suzuki or Suzuki's designated third party," SMC said in a statement.
The arbitration proceedings follow Suzuki's termination of its alliance with Volkswagen AG on November 18, 2011, and Volkswagen AG's lack of response to Suzuki's requests for the disposition of its shares, it added.
In 2009, SMC and Volkswagen (VW) had signed a deal under which the German firm picked up 19.89 percent stake in the Japanese car maker for USD 2.5 billion. It included technology sharing agreement.
SMC has alleged that VW did not allow it access to its core technology despite their agreement.
"It also became clear that there were differences between Suzuki and Volkswagen in the understanding of 'independence'. Suzuki cannot therefore establish a relationship of mutual trust which is the basis for collaboration between the two parties," SMC had said.
Volkswagen AG has however rejected termination of the agreement between the two companies and share transfer.
"There is no legal foundation whatsoever obliging us to surrender our shares. Volkswagen will continue to hold its stake in Suzuki Motor Corp," a spokesperson of Volkswagen AG had said.