Göteborg, Sweden – The U.S. Court of Appeals for the District of Columbia Circuit has ruled that the Volvo Group should pay penalties and interest of approximately $74million following a dispute between the Volvo Group and the U.S. Environmental Protection Agency (EPA) regarding emission compliance of diesel engines.
The Court of Appeals affirmed (pdf) a District Court’s ruling that model year 2005 Volvo Penta engines violated the provisions of a Consent Decree. This is expected to have a negative impact on the group’s operating income in the third quarter of 2014.
The Volvo Group had previously accounted for approximately $9.9 million as a provision and approximately $61.6 million as a contingent liability.
In 2012 the District Court issued a judgment ordering the Volvo Group to pay penalties and interest for engines which Volvo claims were not part of the decree. Volvo filed an appeal on several grounds. Volvo will now review the ruling in detail, and consider whether to appeal or not.
Source: Volvo Group