Why Is Vadilal Fighting Over Its Brand? Legal Battle Escalates Between Two Factions

Vadilal Industries has challenged an interim order of the Bombay High Court that restrained the company, its affiliate Vadilal International and the Ahmedabad branch from interfering with the Mumbai branch's manufacture, sale, distribution and marketing of ice creams and juices under the Vadilal brand.

According to a report by The Economic Times, a division bench of Justice Ravindra Ghuge and Justice Gautam Ankhad has scheduled the matter for hearing on October 6. The challenge comes after a single-judge bench granted interim protection to the Mumbai faction on June 30.

The single-judge order allowed the Mumbai branch to continue using the Vadilal brand, observing that its rights appeared to be linked to a 1993 family settlement rather than a revocable commercial licence.

Dispute Traces Back to 1993 Family Settlement

The legal battle began after the Mumbai faction approached the court under Section 9 of the Arbitration and Conciliation Act, seeking interim protection. It alleged that the Ahmedabad faction had attempted to terminate agreements that allowed it to manufacture and sell Vadilal ice creams and juices in Maharashtra, Goa, Karnataka, Kerala and undivided Andhra Pradesh.

At the centre of the dispute is a 1993 settlement that divided the family business between two branches after disagreements over management and future expansion. The arrangement was implemented through four connected documents, including a parent agreement, branding agreement, irrevocable power of attorney and registered user agreement.

The conflict escalated after Vadilal International, controlled by the Ahmedabad branch, issued a notice on May 26 seeking termination of the registered user agreement. The Mumbai faction argued that the agreements governing brand usage were part of a larger family arrangement and that disputes should be resolved through arbitration.

Ahmedabad Branch Raises Quality Concerns

The Ahmedabad branch has opposed the Mumbai faction's claims, arguing that repeated quality issues and alleged food safety violations in products manufactured by the Mumbai side justified termination of the agreement.

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

The single-judge bench, while granting interim relief, noted that stopping the use of the Vadilal brand after more than three decades could lead to significant disruption. However, the court also acknowledged concerns raised by the Ahmedabad branch regarding protection of the brand's goodwill and the impact of alleged quality issues on consumer confidence.

The division bench will now examine the matter further as both sides continue their legal battle over rights linked to one of India's well-known ice cream brands.