UFJ Holdings Inc. contested in court Monday a Sumitomo Trust & Banking Co. demand that UFJ and Mitsubishi Tokyo Financial Group Inc. be ordered to halt talks on merging trust banking operations.
The Tokyo District Court session was the first for a lawsuit filed Oct. 28 by Sumitomo Trust following UFJ's decision to merge with Mitsubishi Tokyo, scrapping a basic agreement in May to sell UFJ Trust Bank to Sumitomo Trust.
In Monday's session, Sumitomo Trust said its deal with UFJ Holdings gave it the exclusive right to hold long-term negotiations on a UFJ Trust acquisition and that the accord has "decisive binding power."
It also asked the court to hand down a speedy ruling, saying, "Illegal actions (by UFJ) contravening the (May) agreement should not be tolerated anymore."
Raising objections against the Sumitomo Trust assertions, UFJ told the court the business community is full of precedents in which merger and acquisition agreements have been scrapped after basic accords were signed.
The UFJ Holdings-Sumitomo Trust deal had effectively lost its validity, UFJ told the court.
UFJ reversed course in July, seeking a comprehensive merger with MTFG as it judged an alliance only in the trust division would not result in its rehabilitation.
Although the court on July 27 issued a provisional injunction to halt the UFJ Holdings-MTFG merger talks, UFJ appealed to the Tokyo High Court, which overturned the injunction Aug. 11.
The next day, UFJ and MTFG signed a memorandum of understanding for a merger.
Although Sumitomo Trust sought a Supreme Court injunction on the merger talks, the top court sided with the high court on Aug. 30.