By Wang Zhenghua (China Daily)
Updated: 2007-12-12 09:10

French food giant Danone Groupe SA will attempt to persuade a Chinese court to throw out a decision that would hand the well-known Wahaha brand back to its estranged joint venture partner, the company said yesterday.

Accusing the Hangzhou Arbitration Commission of breaching the law and being suspected of local protectionism, the French firm said it would take the matter to an intermediate court in Hangzhou, capital of East China's Zhejiang Province.

The arbitration body has ruled in favor of Chinese beverage producer Wahaha Group by handing the Wahaha brand to the Chinese partner rather than their joint ventures, 51 percent owned by Danone. The two are involved in a controversial commercial row that went public in April.

Wahaha's attorney yesterday said the ruling was fair and accused Danone of being "irrational". The arbitration body declined to comment.

The complicated dispute, which has aroused the attention of top leaders in both countries, largely centered on the ownership of the water and soft drinks brand and the legality of dozens of non-joint ventures set up by Wahaha's millionaire chairman Zong Qinghou, that churn out products under the Wahaha brand.

According to Chinese law, the Chinese court will have a final ruling if Danone demands to throw out the decision by the arbitrator.

During a press conference in Shanghai yesterday, Danone challenged the ruling about the controversial brand transfer agreement between Wahaha Group and Danone.

"We hold that the ruling seriously breached the law and stained the law," Tao Wuping, Danone's chief legal counsel, said.

"We will appeal to the related people's court and plead for the ruling to be thrown out. That will be done in the near future."

Several days ago, a court in South China also ruled in favor of Wahaha Group over its claim that Danone's senior executive held positions at a number of rival Chinese firms, a result the French firm challenged as well.

"The two results were made public at nearly the same time. Do you think it's coincidence? I don't think so," Bertrand Austruy, Danone's general counsel in the Asia-Pacific region, said yesterday.