Vadilal Industries challenges interim protection for Mumbai branch in brand dispute

MUMBAI: Ice cream maker Vadilal Industries has challenged a single-judge ruling that granted interim protection to the Mumbai branch, restraining the company, its affiliate Vadilal International, and the Ahmedabad branch from interfering with or obstructing the Mumbai branch's manufacture, sale, distribution and marketing of ice creams and juices.

A division bench of justice Ravindra Ghuge and justice Gautam Ankhad has posted the matter for hearing on October 6.

Earlier, on June 30, justice Amit Borkar granted interim relief to the Mumbai faction, observing that its decades-old rights to use the 'Vadilal' brand across western and southern India are prima facie rooted in a 1993 family settlement rather than a revocable commercial licence.

The Mumbai faction had originally approached the court under Section 9 of the Arbitration and Conciliation Act, seeking interim relief. It alleged that the Ahmedabad faction had attempted to terminate agreements that allowed the Mumbai branch to manufacture and sell ice cream and juices under the Vadilal name in Maharashtra, Goa, Karnataka, Kerala and undivided Andhra Pradesh.

At the heart of the dispute is a 1993 settlement that divided the family business between two branches following internal disagreements over management and future expansion. The settlement was implemented through four interlinked documents: a parent agreement, a branding agreement, an irrevocable power of attorney, and a registered user agreement. The conflict escalated after Vadilal International, controlled by the Ahmedabad branch, issued a notice on May 26 terminating the registered user agreement.

Before the single-judge order, the Mumbai faction, led by Shailesh Gandhi and Vadilal Dairy International, argued through its counsel that the agreements governing the use of the 'Vadilal' brand were inseparable components of a single family arrangement and that disputes had to be resolved through arbitration under the parent agreement.

The Ahmedabad branch argued that repeated quality failures and alleged food safety breaches in products manufactured by the Mumbai faction justified the termination.

Vadilal Industries, through its counsel, argued that the company is publicly listed and that retail shareholders hold a 35% stake.

In the matter, Vadilal Industries is represented by Ativ Patel of AVP Partners, while the other members of the Ahmedabad faction are represented by senior counsel Venkatesh Dhond and Shalaka Patil of Trilegal. The Mumbai faction is represented by senior advocate Mustafa Doctor and counsel Hiren Kamod, along with Faraz Alam Sagar of IndusLaw.

The single-judge ruling observed: "The petitioners have demonstrated that discontinuance of the 'Vadilal' brand after more than three decades is capable of causing extensive disruption. 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."