The partnership, announced in 2009, was intended to explore fuel-efficient vehicles and provide Volkswagen with a route into the Indian market for small cars helped by Suzuki's leading position but both parties have accused each other of failing their contractual obligations.

In the ruling by the International Chamber of Commerce, Volkswagen was ordered to dispose of its 19.9% in Suzuki, which was bought as part of the agreement. The German carmaker said it expects positive effects on its earnings and liquidity from the transaction.

Suzuki has said it planned to buy back the shares from VW at a "reasonable" price. It added that it does not foresee any need to amend its forecast of consolidated results for the fiscal year ending 31 March 2016.