Groupe Danone said on Monday that requests brought by Wahaha's trade union in its latest lawsuit against the French food group had no legal ground.
Danone said in a statement that it had not received a court notice on the suit, but it was ready to respond by legal means.
Wahaha's trade union filed the suit against Groupe Danone and its two subsidiaries on December 6 in the eastern province of Shandong. It claimed the company had damaged the interests of Wahaha workers by holding shares and appointing the same board directors in the competitors of the Danone-Wahaha joint venture. It had also damaged Wahaha's reputation in the media.
The union asked Danone to stop holding shares in the non-Wahaha-Danone joint ventures and asked for 10 million yuan ($1.35 million) compensation.
The Intermediate People's court of Weifang City in Shandong sealed the assets of the two joint ventures - the Weifang Wahaha Beverage Limited Company and Weifang Wahahah Food Limited Company - that were estimated to be worth 9.18 million yuan.
Danone's two subsidiaries are shareholders of the two Weifang companies.
It was the first time Wahaha had pointed directly to Groupe Danone in its lawsuits related to the trademark disputes with its French partner since April.
The Hangzhou-based Chinese beverage producer sued Dannone's director of the joint venture board and won two lawsuits in Hangzhou and Guilin, south China, earlier this month.
Li Su, Wahaha's spokesperson, said Wahaha had not ruled out further legal action against Danone.
"If negotiations worsen, we don't rule out the possibility that we will take the same actions in other Wahaha-Danone joint ventures," Li said.
Danone expressed its wish in Monday's statement to solve the dispute through negotiations. It called on all parties involved not to take any further actions to intensify the dispute.
"We always hold that to solve disputes through negotiations are in line with the benefits of all parties, including all Wahaha employees. We believe we can realize this goal though there are lots of difficulties," it said.
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. Danone had demanded a 51-percent stake in the non-joint venture companies, which Wahaha rejected.
Since mid-year, the two companies have filed numerous complaints and lawsuits against each other in various Chinese and foreign jurisdictions.
Danone filed its first lawsuit against Wahaha on May 9 in Stockholm. On June 4, Danone filed suit in Los Angeles against two Wahaha-related companies and two individuals.
Also that month, Wahaha filed a request with the arbitration commission in the eastern Chinese city of Hangzhou over the disputed trademark transfer.
It had also lodged suits in Shenyang and Changchun against Danone executives Emmanuel Faber who replaced Zong Qinghou as chief of the 39 joint ventures, Qin Peng, China director for Danone Asia, and Francois Caquelin, a financial director. It claimed they had breached company law or damaged the interests of the Danone-Wahaha joint venture.
ln July, Danone filed a counterclaim against Wahaha, alleging the company had failed to transfer trademarks to their joint venture under an agreement reached in 1996 when their cooperation started.
Danone and Wahaha negotiated for another round before French President Nicolas Sarkozy visited China late last month. The talks, however, were fruitless.
(Xinhua News Agency December 18, 2007)
