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Shimoji Town in court fight over aloe vera business

Date Posted: 2004-05-27

Shimoji Town on Miyako Island finds itself in a court battle with a German company over an aloe vera venture that went sour.

Aloe vera has been long known for its healing properties. It is widely used in traditional Okinawan medicine, and is currently used in cosmetics, health drinks and medicines. It is also widely cultivated in Okinawa as a cash crop.

With this in mind, Shimoji Town a few years back established a 3rd sector joint venture with a German-based company Galman International GmbH. According to this agreement, the parties established a company called “Coral Vegetable” with the purpose of cultivating aloe vera. Galman International was agreed to be the sole buyer of the crop.

However, the demand for aloe vera was such that local managers of the company sold their crop to several other buyers, and when Galman International found out, they took Shimoji Town to the court and demanded ¥33 million in compensation for breach of contract. “Shimoji Town and Coral Vegetable clearly are in breach of contract and have caused us economic losses as they sold aloe to our competitors,” a spokesman for Galman International states.

The Naha District Court agreed and ruled on Apr. 30 that Shimoji Town should pay ¥33 million to the German company. Officials representing Coral Vegetable and Shimoji Town wow to continue fighting, and have taken the case to an upper court. “We don’t want to fight like this, but we don’t want to admit that we have breached the contract. It is our field and our crop. Our German partner should have offered to pay a fair market price for the aloe instead of trying to get it at extraordinary low price,” a spokesman for Coral Vegetable said.

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