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December 5, 2009

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Mediators helps settle melamine dispute

A LOCAL dairy company has refunded a 100,000-yuan (US$14,646) deposit to a trading firm after a batch of milk powder failed to pass the market watchdog's melamine test in the national milk scandal last year.

The trading firm, whose milk powder was found to contain melamine, sued the dairy producer for compensation after its dealers returned the products. But the firm failed to prove the melamine was added in the production process.

The two companies have now reached consensus under the mediation of the Songjiang District People's Court, officers said yesterday.

Shanghai Xiwei Trading Co Ltd signed a contract with Shanghai Niubao Dairy Co Ltd last June for the dairy firm to process baby formula milk powder for the trading company.

The raw material was provided by Xiwei.

It paid a deposit of 100,000 yuan and 66,000 yuan in processing fees.

However, the national quality watchdog found excessive melamine in a batch of the powder.

The trading firm had then sued the dairy firm for a refund of the deposit and processing fees and for compensation.


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