‘Danone v Wahaha: Who Laughs Last?’
Multinational Companies may result in culture clashes, incompatibility of Western corporate governance and legal resolution strategies. As one of the most successful joint venture models, the high-profile Danone/Wahaha dispute has been accelerated into a two-year legal feud against the infringement of the famous brand of WAHAHA across jurisdictions. The case represents a significant watershed which reflects the status quo of controversies over cooperation and competition in China. Under the current legal framework, Danone’s withdrawal would serve as a wake-up call for both foreign investors and Chinese companies in the dramatically increasing cross-border merger & acquisitions. The seminal case perfectly illustrates unwritten issues about public opinion, nationalism and the rule of law. Danone v. Wahaha has also been commonly conceived as a landmark case through which Chinese side may verify the fairness of the Western judicial system, while the European party may regard it as a touchstone for China’s investment environment as well as the specific sphere of contract spirit. It also offers myriad lessons, including the need for watertight contracts, IP rights, and international arbitrations.