Mumbai-based Vadilal Dairy International seeks interim relief, claiming exclusive rights over ice cream and juice businesses in select territories under a 1993 family settlement
A decades-old arrangement governing the use of the Vadilal brand has returned to court, with the Mumbai faction of the Gandhi family seeking protection of its alleged rights to manufacture and sell ice creams and juices under the brand name, according to media reports.
Vadilal Dairy International (VDIL), led by Shailesh Gandhi, has moved the Bombay High Court under Section 9 of the Arbitration and Conciliation Act, seeking interim relief against members of the Ahmedabad-based branch, including Vadilal Industries and affiliated entities.
The Mumbai company has asked the court to restrain the respondents from interfering with the manufacture, sale, distribution and marketing of its products in territories that it claims were allotted to it under a family settlement signed in 1993.
Rights Under Settlement
According to the Mumbai branch, the 1993 agreement granted it perpetual and irrevocable rights to use the Vadilal trademark for ice creams and juices in Maharashtra, Goa, Karnataka, Kerala and the erstwhile undivided Andhra Pradesh. In return, it relinquished its shareholding in the group’s trademark-holding company.
Justice Amit Borkar heard arguments from all parties and has reserved the matter for orders.
During the hearing, senior advocate Mustafa Doctor, appearing for the Mumbai branch, argued that the Ahmedabad faction had previously explored acquiring the Mumbai business. However, the proposed transaction did not materialise, resulting in multiple disputes before different judicial forums.
The Mumbai arm further alleged that the Ahmedabad side had taken several actions that adversely affected its business, including initiating trademark litigation in the United States, raising concerns regarding product quality, seeking product recalls and attempting to inspect its manufacturing facilities.
Quality Concerns Raised
Countering these allegations, senior counsel Venkatesh Dhond, representing the Ahmedabad branch, submitted that products manufactured by VDIL had repeatedly shown severe microbiological contamination. According to the respondents, this amounted to a breach of quality-control provisions contained in the registered user agreement executed in 1992 following the division of the family business.
Separately, senior counsel Shiraz Rustomjee, appearing for Vadilal International, challenged the maintainability of the petition, arguing that the parties had agreed to resolve disputes before a district court in Ahmedabad.
Representing Vadilal Industries, senior counsel Zal Andhyarujina contended that the listed company was not a signatory to the family agreements and therefore should not have been impleaded in the proceedings. He further submitted that Vadilal Industries operates as a licensee of the Vadilal brand and noted that nearly 35 per cent of its shareholding is held by public investors.
The Mumbai branch has invoked the arbitration clause contained in the 1993 family settlement and is seeking interim protection from the Bombay High Court until an arbitral tribunal delivers its final award.
