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Wahaha's legal victory signals end of disputes

By Tu Lei (chinadaily.com.cn)
Updated: 2009-03-02 18:51

A Los Angeles Superior Court on Saturday turned down a lawsuit filed by Danone in June 2007 against Ever Maple Trading, the parent company of Wahaha.

Related readings:  Danone, Wahaha spar in US court  Wahaha, Danone start trademark arbitration  Danone wants full or partial exit from JV with Wahaha  Danone says contacts with Wahaha continuing

Danone, which owns a 51-percent stake in 39 Danone-Wahaha joint ventures, accused Wahaha of setting up independent companies and selling products identical to those sold by the joint venture in 2007.

It is Wahaha's 21st legal victory against French beverage maker Danone in the past two years, and sources close to the matter said the decision indicated the fight between Wahaha and Danone is coming to an end.

Zhang Malin, a lawyer from School of Law with Southeast University, told International Finance News that Danone does not have a chance to win the lawsuit based on the judgment. "The decision has declared the failure of Danone's lawsuit," said Zhang.

Among the disputes, Danone had demanded a 51-percent stake in the non-joint venture companies, which Wahaha rejected. Wahaha Chairman Zong Qinghou claimed it was a malicious takeover bid as the companies had total assets of 5.6 billion yuan ($819 million) and profit of 1.04 billion yuan in 2006.

Since mid-2007, the two companies have filed numerous complaints and lawsuits against each other in various Chinese and foreign jurisdictions.