Nov. 10 – A Swedish arbitration court was found to have ruled in favor of French food group Danone saying that Chinese beverage producer Hangzhou Wahaha breached confidentiality and non-competition agreements.

The confidential arbitration decision was given on the same day that Danone decided to amicably settle the matter with Wahaha reports The Financial Times. The ruling is not legally binding with both parties already agreeing to settle the dispute in September. Danone sold its 51 percent stake in the joint venture for US$450 million thus dropping all legal proceedings related to the case. 

Danone filed the trademark case at the arbitration arm of the Stockholm Chamber of Commerce in January to decide on the ownership of the US$2.4 billion Wahaha name. Since 2007, the French company has charged Wahaha founder, Zong Qinghou, of establishing parallel companies that directly competed with their joint venture. Danone has since filed 30 lawsuits in seven countries against Wahaha.

Financial Times says that the report made by the three-member tribunal panel shows a detailed account of how the relationship between the joint venture partners came to be.

The high profile Danone Wahaha joint venture case has been used as an example of how joint ventures in the country can unravel and eventually disintegrate. What was once touted a showcase joint venture is now a cautionary tale for both foreign and local investors on the intangible aspects of entering into a joint venture in China. Conflicts stemming from clashing marketing, management and investment styles is destined to have a huge effect on the success and longevity of a venture.

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