China’s tainted milk saga is not over yet. As you no doubt recall, several milk and infant formula products in 2008 were found to contain dangerous levels of melamine, a chemical that had been added so tested milk would show a higher protein level. Thousands of infants became ill and several died after ingesting melamine-laced products. This story has become so big that (as I just found out) it even has its own Wikipedia page.

Although a fund has been set up in China to provide compensation for victims and their families, many are not satisfied with the procedures or the level of compensation the fund provides. Because China-based litigation is seen as too onerous for some of the injured parties, for a variety of reasons, lawsuits in other jurisdictions are being attempted.

Last month, I wrote about one such attempt in the U.S. The injured parties went after a U.S. holding company, a subsidiary of which was one of the dairy enterprises in China engaged in melamine doping. The U.S. federal court dismissed the case on the grounds of forum non conveniens, essentially saying that the case would be best heard in China.

But wait, the story’s still not over. Several would-be plaintiffs are now trying to use the Hong Kong courts. As the Associated Press reported this week:

Frustrated by their inability to get compensation in China, four parents whose children were poisoned in the country’s tainted milk scandal on Tuesday took their cases to Hong Kong, a former British colony that maintains a Western-style judicial system.

The four parents are suing the New Zealand farmer-owned dairy cooperative Fonterra. Their children were among 300,000 sickened after consuming milk products deliberately contaminated with the industrial chemical melamine to fool inspectors testing for protein content.

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.

Lawyer Peng Jian, whose firm represents about 200 parents of Sanlu victims, says the $132 million fund set up by the company to compensate victims requires an onerous application procedure and doesn’t treat victims fairly, so four of his clients are seeking compensation in Hong Kong.

These are very sympathetic plaintiffs, and I’m sure everyone hopes that they can be properly compensated at some point. That being said, this Hong Kong litigation is a loser.

The article suggests that they are suing a New Zealand company that owned a Hong Kong subsidiary, which in turn held a minority equity position in a PRC company. I assume that they are actually suing the Hong Kong subsidiary directly, even though that enterprise has not been accused of any direct wrongdoing – why else would they be in a Hong Kong court?

Either way, this case is unfortunately a loser for these poor people. They have already been compensated in China (the amounts are ridiculously low), and like the U.S. litigation, there does not seem to be any reason why a Hong Kong court would involve itself in this matter.