(Bloomberg) -- Japanese convenience-store operator FamilyMart has suffered a legal setback in its ongoing dispute with the billionaire majority owners of its Chinese retailing joint-venture.
The UK’s Privy Council accepted a request by Ting Chuan, which holds a 59.65% stake in the Chinese venture to let the dispute be decided through an arbitration process. The Privy Council also said it would halt any action by FamilyMart to wind up the Cayman Island-based joint venture firm that owned the China business.
The dispute between a Chinese and Japanese company is being heard in the UK because the Privy Council is the the highest court of appeal for the UK’s overseas territories including the Cayman Islands.
FamilyMart sought winding up of the business, saying its relationship with Ting Chuan had “irretrievably broken down.” Ting Chuan is owned by Taiwan’s Wei brothers while FamilyMart holds 40.35% of the joint-venture, according to the ruling.
However, the Privy Council judges ruled that the “real aim” of FamilyMart’s application is to acquire Ting Chuan’s majority stake in the firm.
A lawyer for FamilyMart declined to comment. Emails to Ting Chuan’s lawyers weren’t immediately answered.
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