Hong Kong Rejects Chinese Milk Lawsuits

Judge rejected a lawsuit and claims for compensation by parents of four Chinese children who were among thousands sickened two years ago by tainted milk powder.

HONG KONG (AP) -- A Hong Kong judge on Thursday rejected a lawsuit and claims for compensation by the parents of four Chinese children who were among thousands sickened two years ago by tainted milk powder.

Hong Kong's Small Claims Tribunal adjudicator Ada Yim ruled that the case should be handled by mainland Chinese courts since the plaintiffs are from the mainland and their children were poisoned there.

The parents had sued the New Zealand farmer-owned dairy cooperative Fonterra in the semiautonomous Chinese territory of Hong Kong, hoping its Western-style courts would be more sympathetic to their case. Lawsuits filed in mainland China were ignored, their lawyer said. Their children were among 300,000 sickened after consuming milk products deliberately contaminated with the industrial chemical melamine to fool tests aimed at measuring protein content. At least six children died.

Fonterra was never accused of wrongdoing, but through a Hong Kong subsidiary, it was a minority shareholder in the now-defunct Chinese dairy company Sanlu Group Co., one of the firms at the heart of the milk scandal.

Yim said Fonterra could not be held accountable because as a minority shareholder, it had no control over the production and distribution of Sanlu milk powder. The New Zealand dairy had three out of seven seats on the Sanlu board -- not enough to influence company policy.

"The mainland is undoubtedly the more appropriate forum" for a lawsuit, Yim said.

Peng Jian, who represented the parents, said the judge didn't understand the difficulty of navigating mainland Chinese courts, which critics say are dictated by the political preferences of the ruling Chinese Communist Party. He said he would study the decision before deciding whether to appeal.

Yim's argument that the mainland was the better venue "may be well-founded in theory, but is hard to apply in practice," Peng said.

The four parents, whose children suffered from kidney stones or kidney failure, didn't speak to reporters in Hong Kong after the ruling. They were seeking compensation ranging from 12,400 Hong Kong dollars ($1,600) to $33,500 Hong Kong dollars ($4,300).

Earlier in oral arguments, one of the four accused Fonterra of delaying going public with the faulty Sanlu supplies and profiting from the delay. The New Zealand company was the whistle-blower that alerted the Chinese government to the problem.

"There are already children who have paid for this delay with their lives," said Chen Lu, who traveled from the central city of Zhengzhou.

Fonterra lawyer David Matthews denied that the company procrastinated, and said it lost its 212 million New Zealand dollar ($142 million) investment in Sanlu because the company went bankrupt.

Matthews welcomed Thursday's ruling but said Fonterra has "the greatest respect for the claimants."

"This has been a very tragic situation for all of their families," he said.

A Hong Kong human rights activist said he believes Yim acted on solid legal ground and didn't pander to the Chinese government.

"I really sympathize with these people not being able find justice in the mainland, but that alone is not sufficient reason for Hong Kong to claim jurisdiction," Hong Kong Human Rights Monitor Director Law Yuk-kai said.

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