I have been having a hard time: 1) keeping track of the facts in this case; and 2) finding any sympathy whatsoever for either side in the dispute.

Certainly Wahaha appears to have engaged in blatant competition against its partner, so they are not looking so good in all of this.

Danone comes across as a victim, yes, but one that made some very serious mistakes. This latest arbitration decision leads me first to a very basic question. Why the hell would you agree to arbitration in Hangzhou, the home base of your very strong JV partner? Come on, did you have absolutely no leverage in the negotiation process or did someone screw this one up?

Aside from this, the recent part of this case involves the Wahaha trademark, which was by agreement supposed to be transferred to the JV many years ago. Remember that there is a contract between the parties to this effect, but the actual transfer is something that is not valid until the Trademark Office approves the assignment application and issues a new registration certificate in the name of the new trademark holder (i.e., the JV) — this never happened, of course.

So what are we to make of this comment from Danone's local attorney in Shanghai? (from Reuters)

"Danone always thought Wahaha had been making the application, and only recently we realized that Wahaha had never formally done so," lawyer Tao said.

This was supposed to have happened, I think, sometime after 1996. I know that JV setups were a bit loose back in the old days, but no one thought to check on this? Before you think that this is so preposterous that someone must be lying, think again. I've seen worse, and the idea that a company would never follow up, even for almost a decade, is entirely possible.

Doesn't elicit my sympathies, though. And that comment makes Danone look completely incompetent. Someone needs to muzzle that lawyer quickly. Doesn't anyone hire PR people anymore?

To top things off, here's a wonderful little comment from the Reuters article on this subject:

The dispute has raised concerns among foreign investors about potential risks involved in investing in joint ventures in China.

I am speechless (almost). Here it is, the end of 2007, and this case is alerting foreign investors to JV risks? I have an unfortunate habit of beating journalists about the head and shoulders once in a while for making stupid comments, but this sentence made me apoplectic when I read it. I am printing it out now for inclusion on the Wall of Shame.