Foxconn granted leave to appeal ruling favouring rival BYD

PUBLISHED : Tuesday, 04 January, 2011, 12:00am
UPDATED : Tuesday, 04 January, 2011, 12:00am

Foxconn Technology Group, the world's largest electronics manufacturing services provider, has been given leave to appeal against a court ruling in its long-running legal battle with mainland rival BYD.

In a decision handed down on December 31 at the Court of First Instance, Deputy High Court Judge Louis Chan Kong-yiu said leave was granted because 'the appeal by the Foxconn parties has a reasonable prospect of success'.

This latest twist in the acrimonious dispute is a setback for BYD, whose handset-manufacturing business competes directly with Foxconn, after claiming it suffered damages as the Taiwanese group conspired to cause harm to its business.

In October 2007, three Foxconn units - Shenzhen Futaihong Precision Industry, Hong Fu Jin Precision Industry (Shenzhen) and Foxconn Precision Component (Beijing) - brought a joint action in Hong Kong against BYD and its six subsidiaries for breach of mainland law against unfair competition.

BYD and its subsidiaries, in response, brought a counterclaim last year in Hong Kong against locally listed mobile-telephone maker Foxconn International Holdings, Shenzhen Futaihong, Hong Fu Jin and their Taipei-based parent firm Hon Hai Precision Industry, whose subsidiaries and related operations are known under the Foxconn Technology Group trade name.

It was claimed by BYD, in which US investor Warren Buffett's Berkshire Hathaway has a 10 per cent stake, that the Foxconn group had, since 2006, been unlawfully interfering with its business to damage the company.

BYD alleged the group 'embarked upon a course of conduct of procuring and using false and fabricated evidence, or evidence unlawfully obtained, to launch proceedings' and to publish alleged defamatory statements against it.

On August 24, Chan dismissed Foxconn's motion to strike out certain allegations made by the 'BYD parties' in its counterclaim. He said the BYD plea 'should be allowed to develop and be decided by the trial judge who would be able to hear all the evidence of the parties'.

In his latest ruling, Chan again stressed the matter should proceed to trial. But, the BYD parties may be found liable to Foxconn if they 'fail to satisfy the court that such evidence [used by Foxconn] is wrongful or wrongfully obtained, and hence should not be relied on'.

Bitter battle

Hi-tech giants Foxconn and BYD face off in court

The stake in BYD held by Warren Buffett's Berkshire Hathaway: 10%




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