Update: Added Svolt's response.

Nine former CATL employees joined two affiliated companies of Svolt Energy, and CATL believes that the individuals violated their non-compete agreements, according to local media.

Contemporary Amperex Technology Co Ltd (CATL), China's largest power battery maker, has filed a lawsuit against another local battery maker, Svolt Energy, for unfair competition, according to a report by Jiemian today.

CATL (SHE: 300750) has launched a lawsuit in the Intermediate People's Court in Ningde city, Fujian province, where it is headquartered, and the case is set to go to trial this month, according to the report.

Between 2018 and 2019, nine former CATL employees joined two affiliated companies of Svolt Energy. CATL argues that the individuals breached their non-compete agreements and is therefore seeking RMB 1 million in damages for breach of contract, according to the report.

CATL had previously filed for arbitration with the labor arbitration commission and obtained support for the RMB 1 million claims against five of the former employees, according to the report.

According to a subsequent report from Sina Tech, Svolt said it has taken note of the report and the company is already actively preparing to respond to the lawsuit.

Svolt believes there will be a fair verdict from the court in Ningde, it said.

Svolt, a power battery company funded by Great Wall Motor in 2018, focuses on cobalt-free battery and solid-state battery research and development, and has established R&D centers in Japan, South Korea, the United States, India, Wuxi, Baoding and Shanghai.

The company currently has eight production bases with 297 GWh of capacity under construction, including 30 GWh of capacity in Europe.

According to data released last month by the China Automotive Battery Innovation Alliance (CABIA), CATL's power battery installed base in China for the full year 2021 was 80.51 GWh, with a 52.1 percent market share.

Svolt is in sixth place with a 2.1 percent market share and an installed base of 3.22 GWh in 2021.

The lawsuit against Svolt is the latest in a series of legal actions taken by CATL in the Chinese market.

At the end of July last year, China Securities Journal reported that CATL had sued a smaller rival, China Aviation Lithium Battery Technology (CALB), for patent infringement involving the latter's entire product line.

CALB said the products it offers to customers have been thoroughly risk investigated by a professional IP team and believes its products do not infringe on the IP rights of others, according to Jiemian at that time.