Lawyers divided over Wahaha deal
Updated: 2007-07-19 15:12
The rift between China's largest drinks maker Wahaha and French food and beverage giant Danone is deepening as Wahaha Group's partner filed a lawsuit against a joint venture director of Danone, saying he illegally serves on the boards of competing firms.
For now, the public is convinced that Danone, accusing Wahaha of contract breach and taking the lead to take the matter to an international arbitration body and an overseas court, has the upper hand in the legal battle.
But that apparent advantage shrank after the Chinese company argued its contract with Danone on transfer of the well-known Wahaha brand from Wahaha Group to its joint venture with Danone was invalid, claiming that the partners had joined forces to design a plot to get around the rules. Law circles are split if such a contract, which Wahaha says, was never approved by the authorities in the first place, is valid though they agree that it's the key to the long wrangle involving legal action in three countries.
"Whether their contract is valid is an extremely contentious issue," said Si Weijiang, deputy secretary-general of All China Lawyers Association's intellectual property section.
"The two major battles between Wahaha and Danone will take place in Hangzhou and Stockholm," where they have pleaded arbitrations respectively.
He said other legal actions are only "subsidiary battles" surrounding the contract controversy, referring to Wahaha's recent step of taking joint venture board member Qin Peng from Danone to the court in Shenyang of northeastern China.
Danone also filed a lawsuit in Los Angeles, the US, earlier this year accusing Wahaha of violating contract by using the Wahaha brand on products sold outside their joint ventures.
Danone, the world's largest yogurt maker, signed an agreement with Wahaha in 1996 that required the transfer of the Wahaha brand from the Chinese company to the joint ventures, in which Danone owns 51 percent.
In the contract, the Chinese company was barred from making products that compete with those produced by the joint ventures, or using the Wahaha brand without Danone's consent.
But Zong Qinghou, the charismatic chairman and founder of Wahaha Group, contends the transfer deal is invalid because it was never properly approved by the authorities.
|
|