A Chinese arbitration body has ruled in favor of local beverage
producer Wahaha Group in its legal wrangle with estranged partner
Danone Groupe SA.
Yesterday's ruling by the Hangzhou Arbitration Commission found
that the agreement to transfer the Wahaha brand to its joint
ventures with Danone, a focus of their high-profile row, has
terminated.
The commission also said Danone's demand for Wahaha Group to
abide by the brand transfer agreement had exceeded the lawsuit's
time limit.
Danone said it was "shocked" by yesterday's ruling, which it
claimed was made "after Wahaha's major evidence to the arbitration
body was overruled by the facts". Wahaha Group was not available
for comment yesterday.
The two sides are still waiting for the results of arbitration
proceedings in Stockholm and a lawsuit in Los Angeles. The French
company has accused Wahaha Group of breach of contract by using the
Wahaha brand on products sold outside their joint ventures, which
are 51 percent controlled by the French food company.
The dispute between Wahaha and Danone first came to light in
April, when Wahaha Group chairman Zong Qinghou accused Danone of
hostile takeovers that would result in Wahaha losing control of its
own brand.
As the dispute escalated, Danone initiated an arbitration case
in Sweden and a lawsuit in the US. In June, Wahaha filed an
arbitration claim in Hangzhou, Zhejiang Province, seeking to
terminate the trademark-transfer agreement, claiming it never
formally or legally transferred the trademark from Wahaha
Group.
Danone filed a counterclaim with the Hangzhou commission,
rejecting Wahaha's statement and demanding its Chinese partner
abide by the trademark-transfer agreement.
"Ignoring the basic facts, the arbitration commission made the
wrong decision that the transfer agreement has terminated," Danone
said in a statement yesterday.
The French company also objected to the arbitrator's decision
that its demand for Wahaha to continue to abide by the agreement
had exceeded the time limit. Danone said it only discovered in June
that Wahaha wanted to terminate the agreement.
A court in the Guangxi Zhuang Autonomous Region has also ruled
in favor of Wahaha Group over its claim that Danone's senior
executives held positions at a number of rival Chinese firms.
(China Daily December 11, 2007)
