TEL AVIV (Oct. 20)
The Kaiser-Frazer company in Israel will sue the Renault auto firm of France for $2,000,000 in damages for breach of contract, Ephraim Illin, general manager of the Israel company, announced today.
Mr. Illin cited documents relating to the current agreement between the two companies, dated February 27,1959. which permits cancellation of contract without damages only if the Government of France banned the supply of car parts to Israel for assembly here.
He said that this was not the reason given by Renault for ending the agreement under which the French firm’s Renault was assembled in the Haifa factory of Kaiser-Frazer. The company’s attorneys have started collected material for the damage suit.
Renault car owners in Israel had some consolation. The Arab boycott regulations, to which it was presumed Renault bowed in cancelling the agreement, do not ban shipments of spare parts to Israel.