Justice Amit Borkar restrains Ahmedabad faction from interfering with the Mumbai group’s manufacture, sale and distribution of Vadilal-branded products pending arbitration
The Bombay High Court has granted interim protection to the Mumbai faction of the Vadilal ice cream business, holding that its long-standing right to use the ‘Vadilal’ brand across parts of western and southern India appears to arise from a 1993 family settlement rather than a revocable commercial licence.
Justice Amit Borkar restrained Vadilal Industries, Vadilal International and members of the Ahmedabad faction from interfering with the Mumbai group’s manufacture, sale, distribution and marketing of ice creams and juices under the Vadilal brand until the arbitration between the two sides is concluded.
The Ahmedabad faction may challenge the interim order before a division bench of the Bombay High Court.
Origin Of The Dispute
The Mumbai faction approached the court under Section 9 of the Arbitration and Conciliation Act, seeking interim relief. It alleged that the Ahmedabad faction attempted to terminate agreements governing the Mumbai group’s right to manufacture and sell Vadilal-branded ice creams and juices in Maharashtra, Goa, Karnataka, Kerala and the erstwhile undivided Andhra Pradesh.
The dispute stems from a 1993 family settlement that divided the Vadilal business between two branches following differences over management and expansion plans. The arrangement was implemented through four interconnected documents, including a parent agreement, a branding agreement, an irrevocable power of attorney and a Registered User Agreement (RUA).
The latest litigation followed a notice issued on 26 May by Vadilal International, controlled by the Ahmedabad faction, seeking to terminate the RUA.
Arguments Before Court
Appearing for the Mumbai faction, led by Shailesh Gandhi and Vadilal Dairy International, senior advocate Mustafa Doctor and counsel Hiren Kamod argued that the brand-use agreements formed an inseparable part of the broader family settlement and that disputes should be resolved through arbitration under the parent agreement. Advocates Faraz Alam Sagar and Surya Sambyal of IndusLaw also represented the Mumbai side.
The Ahmedabad faction, represented by senior counsel Venkatesh Dhond and Shalaka Patil of Trilegal, argued that repeated quality lapses and alleged food safety violations by the Mumbai business justified termination of the agreements.
Representing Vadilal Industries Ltd, senior counsel Zal Andhyarujina and Ativ Patel of AVP Partners submitted that the listed company was not a party to the agreements executed between family members despite being impleaded in the proceedings. “We have been made a party in the case, whereas we are not a party or signatory in any agreement between family members,” argued Andhyarujina.
Court’s Observations
In its 122-page order, the court observed, “The petitioners have demonstrated that discontinuance of the ‘Vadilal’ brand after more than three decades is capable of causing extensive disruption.”
At the same time, the court noted, “Equally, the respondents (Ahmedabad branch) have raised concerns regarding protection of the goodwill associated with a registered trademark and the impact of alleged quality deficiencies upon public confidence.”
The court further observed that “the task of the court, therefore, is not to determine which party has a better commercial claim, but to ascertain which course is likely to preserve the subject-matter with the least risk of irreversible prejudice.”
The interim order will remain in force until the arbitration proceedings between the two factions are completed.
