Danone heft een belangrijke nederlaag geleden in een juridische strijd om zijn Chinese Alliantiepartner Wahaha Group te dwingen zijn belangrijkste merk in te brengen in een gezamenlijke joint venture. Zie het onderstaande bericht van FT.com

Danone has lost an important part of its legal battle with a Chinese partner after a local arbitration body ruled in favour of Wahaha Group in a dispute over the joint venture’s main brand.

The French group said it was “shocked” by a decision from the Hangzhou Arbitration Commission in eastern China, which ruled that Wahaha Group should terminate an agreement to transfer its principal trademark to the joint venture.

The case is the latest episode in a feud between the two partners, which erupted this year when Danone accused Wahaha of setting up a parallel operation to make and sell the same products as the joint venture.The ruling raises further questions about the future of the lucrative joint venture, which contributed 5-6 per cent ofDanone’s operating profits last year. Danone has said that its China sales in the second half of this year will likely be reduced by a third due to the quarrel.

The dispute, which Nicolas Sarkozy, the French president raised during his recent visit to China, has raised concerns among foreign companies about the risks of entering joint ventures in China.

The two companies first signed a partnership in 1996 and since then the joint venture, in which Danone has a 55 per cent stake, has turned Wahaha mineral water into the market leader in China and one of the best-known consumer brands in the country.

The row partly revolves around the issue of which company owns the rights to use the Wahaha brand name. In the initial 1996 joint venture agreement, Wahaha Group agreed to transfer the trademark to the new company.

However, when the dispute erupted earlier this year, Wahaha Group alleged that the transfer agreement had been rejected at the time by the local government, which meant the brand name was never actually controlled by the joint venture. The Hangzhou Arbitration Commission, based in Wahaha’s home town, accepted the company’s request that the transfer agreement be terminated.

Danone said the commission had made a “wrong” decision which “ignored fundamental facts” about the case. The group said that the local trademark office had made it clear that the trademark transfer agreement was never actually rejected.Danone said it would contest the ruling. It also said the two companies signed a further licensing agreement in 1999 which gave the joint venture the right to use the Wahaha name. Danone has requested that the dispute be heard by an arbitration panel in Sweden and has also launched a lawsuit against a Wahaha subsidiary in Los Angeles claiming $100m in damages.

Wahaha refused to comment on the ruling. The Chinese group, which has claimed that Danone held back expansion of the joint venture and invested in rival operations, has said it will seek damages from Danone.

Vervolg 24 december 2007

Danone and Wahaha of China have agreed a legal ceasefire and return to “peace talks” for the resolution of one of the most high-profile disputes between a foreign company and a Chinese partner. The two had exchanged accusations and lawsuits for many months, with the French company accusing its Chinese partner of setting up copycat operations outside the venture, selling soft drinks and other products under the Wahaha brand, which is named after the sound of a laughing child.

The standoff was discussed at the highest political levels last month during a visit by French president Nicolas Sarkozy to China and raised during a dinner hosted by President Hu Jintao. Franck Riboud, Danone chairman, also attended the dinner.“Both parties agree to temporarily suspend all lawsuits and arbitrations, stop all aggressive and hostile statements and create a friendly environment for peace talks,” the companies said in a joint statement.

News of the effort to resolve the dispute over the joint venture with Wahaha, China’s leading mineral water brand, helped send Danone’s shares up 4.7 per cent at the end of last week.Danone accused Zong Qinghou, Wahaha’s founder, of setting up a parallel production and sales operation for the same products made by the joint venture. Mr Zong has not denied the existence of the network, but says Danone reneged on their agreement by acquiring rival businesses in China.

The dispute has drawn widespread attention as an example of the risks in Sino-foreign joint ventures, but Danone recently offered a truce by suspending legal action in China after top French and Chinese leaders said they favoured an amicable resolution.“Both parties will work together to further develop all entities operating under the Wahaha brands and contribute to develop the Sino-French friendship,” the companies said.