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Wahaha Resorts to Arbitration in Danone Dispute
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The Wahaha Group, embroiled with French partner Danone, is planning to ask for arbitration to resolve the trademark dispute, Wahaha's Chairman Zong Qinghou said Wednesday.


The Hangzhou Arbitration Committee will be asked to rule on whether Wahaha may still use the famous brand name on the grounds its agreement with Danone was never approved by China's trademark authority, said Zong at his first press conference since the feud broke out.


In protest, Zong has resigned from his post of chairman of all 39 joint ventures with Danone but has remained as chairman of the Hangzhou-based Wahaha Group.


The base of Zong's claims is that Danone "trapped" the inexperienced Wahaha into signing a joint venture agreement that restricted them from using their own brand name outside the joint ventures. However, Zong provided no further details.  


Danone, which owns 51 percent of the joint ventures, has responded by accusing Wahaha of violating the 1996 agreement by illegally setting up companies outside their joint ventures. Danone is demanding a 51-percent stake in the non-joint venture companies.


Emmanuel Faber, who was named interim chairman of the joint ventures, stated that Danone is pushing for an amicable resolution and hopes to hold a board meeting with Chinese directors in 10 days despite filing a lawsuit against Wahaha in the United States.


Zong expressed his feeling that Faber would do a good job in his new post but needed to stand the test of time, adding that the title itself did not bestow authority and public trust and that it remained to be seen if Faber would be accepted by staff.


Employees of the joint ventures reacted negatively to Faber's appointment and have even staged protests, said a Wahaha spokesman.


(Xinhua News Agency June 14, 2007)


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