By You Yunting
In recent, a spat over the established brand Wang Lao Ji, also known as Wong Lo Kat, which is the most valuable herbal tea trademark in China, has occurred. The biggest distributor of the drink in China, JDB group, claimed that it has filed the application to Beijing No. 1 Peoples’ Bank to revoke the adjudication made by the China International Economic and Trade Committee (CIETAC) on the dispute.
The basic facts of the case in the reports: Guangzhou Pharmaceutical Group Co., Ltd. (the “Guangzhou Pharmaceutical’, SZSE: 600332) is the registered owner of the Wang Lao Ji trademark, who signed a trademark license agreement with Hung To Group Co., Ltd. (the “Hung To”, the parent company to JDB), by which Hung To gets the loan of the trademark of 10 years.
In 2002, a Supplementary Agreement to Wang Lao Ji Trademark License was signed to extend the trademark using to 2013.
In 2003, the parties signed the Supplementary Agreement concerning the Wang Lao Ji Trademark License Agreement, which regulates the matters of extension and record. However, for the detection of bribery of its vice-chairman Li Yimin, who has been judged life imprisonment, Guangzhou Pharmaceutical the signed the contract with Hung To, extending the Wang Lao Ji license to 2020.
In April of 2011, Guangzhou Pharmaceutical filed the arbitration over the trademark to CIETAC, who adjudicated the case on 9th May of 2012, saying that the latter signed 2 contracts are invalid and Hung To shall cease the using of Wang Lao Ji trademark.
On 17th May of 2012, Hung Yo apply to Beijing No.1 Intermediate People’s Court demanding the cancellation of the arbitration decision. And by the report (note: the link is in Chinese), the main reason to support its claim is：
1) a material violation against the legal procedure by the tribunal and
2) the decision violates the social interests.
What we would like to discuss is in which situation could the court revoke the effective arbitration award by China laws? For both parties in the dispute are China based companies, and for this reason the New York Convention of 1958 shall not be applied to the arbitration decision, but the domestic laws in China have similar regulations. By Article 70 of Arbitration Law and Article 258 of Civil Procedure Law, the legal condition to revoke the effective arbitration decision with foreign elements involved (namely at least one party of the arbitration is a foreigner or foreign-based company) shall be limited to the following:
(1) the parties have not stipulated clauses on arbitration in the contract or have not subsequently reached a written agreement on arbitration;
(2) the person against whom the application is made is not duly notified to appoint the arbitrator or to proceed with the arbitration, or the said person fails to state its opinions due to reasons for which he is not held responsible;
(3) the composition of the arbitration division or the procedure for arbitration is not in conformity with rules of arbitration; or
(4) matters decided exceed the scope of the arbitration agreement or the limits of authority of the arbitration agency.
(5) If the people s court determines that the execution of the award at issue is against the social and public interest, it shall order to disallow the execution of the arbitration award.
According to the news report, Hung To’ s applied the revocation with the above paragraph 2, 3 and 5. But there’re rare cases of such situations in practices, and meanwhile the local courts hold a prudent attitude towards the revocation against the arbitration with foreign elements involved, and most application thereby made is likely to be refused when no solid evidence to support.
Therefore, in our view, Hung To’s application to the revocation is to get more time for the brand replacement. And just on yesterday, I purchased the Wang Lao Ji herbal tea produced by JDB. It’s estimated that the stocked herbal tea trademarked as Wang Lao Ji are nor few, and JDB need more time to eat into such stocks and broadcast its new brand.
Other related posts on our website:
1. No “iPad” Chinese trademark right for Apple after payment in the transaction, and our analysis——the Key points to the trademark transaction under the frame of China laws;
2. According to China Court’s First Instance Judgement, Apple Loses the iPad Trademark;
3. The Extension of the iPad Trademark Battle: Proview Charged iPad Distributor GOME in China;
4. A Compromise between Michael Jordan and Qiaodan Sports?
5. Comments on the Trademark Squatting of HERMES
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