Court deals with anti-unfair competition case

2005-01-11

The High People's Court of Liaoning has put the lawsuit of five Chinese magnesia brick manufacturers against an Austrian firm on file recently, indicating fresh moves in the anti-unfair competition case. The five magnesia brick makers in Northeast China's Liaoning Province brought a lawsuit against the Austria-based RHI AG, the largest refractory material maker in the world on December 17, 2004, for violation of the Chinese Anti-Unfair Competition Law. They were notified last week that the case has been transferred to the civil court for investigation. This news is encouraging because it primarily justifies the Chinese enterprises' self-protection, said Fu Donghui, a lawyer from Beijing Allbright Law Offices. The lawyer said he thought the summons would be sent to the headquarters of RHI in Austria and its representative office in China respectively. In the petition to the court, the Chinese enterprises claimed that the Austrian multinational corporation, which initiated an anti-dumping case in the European Union against Chinese refractories makers in July 2004, is taking anti-dumping measures to elbow its Chinese counterparts out of the European market. Fu said if the RHI answered the lawsuit, it will be asked to explain to the high court how it testified to the EU that Chinese refractories enterprises are not of market economy status. The court is also entitled to implement trial and execution by default, if the Austrian company takes no action. If RHI lose the case, it will have to withdraw its anti-dumping appeal to the EU or compensate the Chinese enterprises for their loss in the European market. "No matter what the final judgment turns to be, this case will be of great significance to other Chinese enterprises," Fu said. Yu Yi, a senior official with Yingkou Qinghua Group, one of the plaintiffs, said RHI is trying to kick its Chinese rivals out of the European market by launching an anti-dumping case. But the company is also cashing in on the low material and labour costs in China. It has established two factories in Liaoning. This case has aroused great concern in refractories sectors both in China and in Europe. An anti-dumping case against 57 Chinese magnesia brick makers was initiated in the European Union in July last year by an industrial association of European refractories makers, RHI, and a Germany-based magnesia brick maker, LWB GMBH. RHI has been playing an active role in the case. After investigation, the EU declined to give market economy status to any Chinese privately-owned enterprises. Turkey was taken as the substitute country for price evaluation, but in fact the costs of magnesia bricks in Turkey are about 20 per cent higher than those in China. If penalty tariffs are imposed on the products of Chinese refractories makers, it will be a severe blow and force them to give up Europe, one of their largest exports markets.