Another statement in the war of words between Red Bull China and Thailand's TCP Group! Is Red Bull China's operating term 20 years or 50 years? The war of words between Red Bull China, represented by Yan Bin, and Thailand's TCP Group, representing Thai Red Bull, has gone back and forth several times. Recently, new developments have made the dispute over Red Bull China's operating rights clearer. On October 31, Thailand's TCP Group issued a statement claiming that the China International Economic and Trade Arbitration Commission (CIETAC) had ruled to confirm that the operating term of Red Bull Vitamin Drink Co., Ltd. is 20 years. The statement was jointly issued by Red Bull Vitamin Drink (Thailand) Co., Ltd. ("Thai Red Bull") and Inter-Biopharm Holding Co., Ltd. ("Inter-Biopharm"), stating that they had recently received the "Arbitral Award" made by CIETAC on October 26, 2018. The statement from Thailand's TCP Group said that the arbitral award confirmed the following: Based on the legally binding "1998 Joint Venture Contract" of Red Bull Vitamin Drink Co., Ltd. (the "JV Company", i.e., Red Bull China), the joint venture charter, and the approval certificates and business licenses obtained by the JV Company over the years, the arbitral tribunal determined that the operating term of the JV Company is 20 years. Another shareholder of the JV Company, Global Market Holdings Limited ("Global Market", actually controlled by Mr. Yan Bin), had claimed in the hearing, by way of a counterclaim, that the operating term of the JV Company is 30 years. In this regard, the arbitral tribunal held that this claim was in nature a modification of the operating term clause of the JV Company, but Global Market did not provide evidence that the applicants (i.e., Red Bull Vitamin Drink (Thailand) Co., Ltd. and Inter-Biopharm Holding Co., Ltd.) agreed to change the operating term to 30 years, nor did it provide factual and legal basis for the implied consent of all shareholders to extend the term of the JV Company. Therefore, the arbitral tribunal did not accept this claim. According to the provisions in the JV Company's contract and charter regarding the continuous calculation of the operating period (including the period when the JV Company was in Shenzhen before moving to Beijing, i.e., from 1995 to 1998), the joint venture term should have expired on December 25, 2015, i.e., the term should have been calculated from December 25, 1995, when the JV Company was initially established in Shenzhen. However, due to an error by the JV Company's staff, the period of existence in Shenzhen was not included in the operating period, resulting in the 1998 business license listing the expiration date as September 29, 2018. Since the consequences caused by the erroneous application to the Beijing Administration for Industry and Commerce should be borne by the JV Company and its investors, the arbitral tribunal determined that the joint venture term expired on September 29, 2018. The above "Arbitral Award" is final and takes effect from the date it is made. Is this the end of the long-running war of words? But in a major reversal, less than 24 hours after the statement, Red Bull China hit back. Red Bull China stated that on October 31, 2018, Thai Red Bull and Inter-Biopharm issued a "Joint Statement" claiming that CIETAC had ruled to confirm that the company's operating term is 20 years. In response to this "Joint Statement" which is seriously inconsistent with the facts, the company hereby states as follows:

  1. According to the company's understanding, the arbitral award made by CIETAC on October 26, 2018, was in response to the arbitration request filed by Thai Red Bull and Inter-Biopharm as applicants to confirm that the company's operating term is 20 years. However, the arbitral award contains only two items: first, rejecting all arbitration requests of Thai Red Bull and Inter-Biopharm; second, ordering Thai Red Bull and Inter-Biopharm to bear the arbitration costs. The statement in the "Joint Statement" that the arbitral tribunal "ruled to confirm the company's operating term is 20 years" is completely inconsistent with the content of the arbitral award and is a deliberate attempt to mislead the public and government departments and confuse the issue.
  2. The company's shareholder, Global Market Holdings Limited ("Global Market"), had, in the arbitration proceedings, in order to refute the claim by Thai Red Bull and Inter-Biopharm that the company's operating term is 20 years, argued that the company's operating term should be at least 30 years, and therefore filed a counterclaim to extend the company's operating term to at least 2028. This does not mean that Global Market believes the company's operating term is only 30 years. Moreover, Global Market had already withdrawn its relevant claims and counterclaims during the arbitration proceedings. According to the "Agreement" signed by the joint venture parties as early as 1995, the company's operating term is 50 years. In the above arbitration proceedings, the 1995 "Agreement" was not submitted as evidence, and the arbitral tribunal did not review the contents of that "Agreement".
  3. Regarding the fact found by CIETAC during the arbitration that the company's 20-year business term as registered with the industry and commerce authorities expired on September 29, 2018, this is a factual description based on the company's business registration information, not part of the arbitral award. Before the expiration of the aforementioned term, the company had submitted an application for extension of the business term to the Beijing Administration for Industry and Commerce, which was formally accepted and is still under review.
  4. As of now, the company has not received any application from the Beijing First Intermediate People's Court for compulsory liquidation of the company filed by Thai Red Bull or Inter-Biopharm. However, in any case, since the company has lawfully submitted an application to the relevant authorities for extension of the business term, and the extension application is still under review, even if Thai Red Bull and Inter-Biopharm file such a compulsory liquidation application, their application does not meet the conditions for the court to accept compulsory liquidation according to law, and the liquidation proceedings should not and cannot proceed.
  5. The company emphasizes here that the aforementioned arbitration proceedings initiated by Thai Red Bull, the "Joint Statement" issued, and any applications to the relevant courts for compulsory liquidation of the company (if any) have not been resolved or approved by the shareholders' meeting or board of directors of Thai Red Bull, and the relevant actions or statements have been made by stealing the name of Thai Red Bull. In this regard, according to the company's understanding, Ms. Yan Danhua, the largest individual shareholder of Thai Red Bull, will take legal measures in Thailand to pursue the legal liability of the relevant parties for stealing the name of Thai Red Bull. The company believes that Thai Red Bull and Inter-Biopharm, by ignoring the confidentiality of the arbitral award, deliberately distorting the content of the award, and misleading the public through the media, have seriously infringed upon the company's legitimate rights and interests. If Thai Red Bull and Inter-Biopharm continue to make such irresponsible statements or take such actions, the company will take all legal actions to resolutely defend the good reputation and image that the company has built through years of hard work, and to protect its legitimate rights and interests! It is undisputed that Red Bull China's business registration shows a 20-year operating term. Red Bull China claims this was to meet the special requirements for foreign investment registration approval at the time of establishment, and does not mean that the company's operating term is 20 years. But Red Bull China now emphasizes a 50-year operating term based on another agreement, the "Agreement" signed by the joint venture parties as early as 1995, which sets the operating term at 50 years. In this regard, Yan Bin had previously made a tough statement: If you want to pick the peach, see you in court! For the dispute between Red Bull China and Thailand's TCP Group, no amount of war of words will help; the final decision must come from the court. Source: Food Industry Entrepreneur (shiyehome) -END-