The Bombay High Court has held that where multiple agreements are executed on the same day in implementation of a family settlement, and the material shows that they may form part of one integrated arrangement, the Court can, for Section 9 purposes, treat the arbitration clause in the parent agreement as capable of extending to disputes arising out of the connected implementing documents. The Court clarified that the present dispute could not, at this stage, be reduced to a simple case of termination of the Registered User Agreement alone, because the petitioners had shown an arguable case that their rights flowed from a composite family settlement and that the Registered User Agreement merely operationalised those rights. Accordingly, the controversy required preservation of the subject matter until final adjudication in arbitration.
The Court further held that, in such a situation, interim protection under Section 9 can be granted not to finally declare rights, but to preserve the existing arrangement where the petitioners show a strong prima facie case, balance of convenience, and irreparable injury. It also held that serious disputes about quality, laboratory testing and compliance could not be conclusively decided in Section 9 proceedings on affidavits alone, and those concerns could instead be addressed through safeguards while maintaining the status quo.
The High Court therefore restrained respondent No.17, respondent No.18 and surviving respondent Nos.3 to 9, 12, 13 and 15, pending commencement and conclusion of arbitration and for ninety days after the award or until further orders of the tribunal, from acting upon the communication dated 26 May 2026 insofar as it interfered with the petitioners’ disputed rights under the family settlement. It also restrained them from interfering with the petitioners’ continued use of the “Vadilal” brand in the claimed territories, and from transferring, assigning, licensing, encumbering or otherwise dealing with the disputed rights. The Court however clarified that this did not amount to final recognition of the petitioners’ rights or final invalidation of the termination.
At the same time, the Court imposed safeguards. The petitioners were directed to manufacture and store products strictly in compliance with the Food Safety and Standards Act, 2006 and applicable rules and regulations, maintain all licences and approvals, preserve manufacturing and quality records, and permit reasonable inspections by respondent No.17 upon prior written notice. If any quality dispute arose, samples were to be drawn in the presence of both sides and sent to an NABL accredited laboratory, with reports simultaneously shared. The Court also directed that no public communication should misrepresent the order as a final adjudication, no irreversible third-party rights should be created, any amalgamation between respondent Nos.17 and 18 would remain subject to the arbitration outcome, and the arbitral tribunal would be free to modify, vary or vacate these interim measures independently.
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A Single Judge Bench of Justice Amit Borkar observed that, at the Section 9 stage, it was not expected to finally decide the parties’ substantive rights or give a conclusive interpretation of all four agreements. However, on a prima facie reading, the Memorandum of Agreement dated 30 March 1993 appeared to be the main or parent document recording the broader family settlement and restructuring of the Vadilal family business, while the Branding Agreement, the Irrevocable Power of Attorney and the Registered User Agreement appeared to have been executed simultaneously to give effect to that larger arrangement. The Bench said the petitioners had raised a substantial and arguable case that these four documents were interconnected parts of one composite family settlement and could not be treated as wholly disconnected agreements at this stage.
The Bench also observed that the present dispute arose out of a family settlement background and not an ordinary commercial arrangement alone. It noted that the petitioners were not merely challenging termination of a trademark licence, but were alleging that the impugned communication had the effect of denying rights flowing from the entire family settlement. The Bench further found, prima facie, that respondent No.17 could not be treated as a stranger to the arbitration clause, since it had executed and acted upon the connected agreements for over three decades, and that objections regarding respondent Nos.17 and 18, non-signatory status, group of companies doctrine and the proposed merger raised substantial questions requiring final adjudication before the arbitral tribunal.
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On territorial jurisdiction, the Bench did not accept the respondents’ argument that the phrase in Clause 10.1—“the party who has necessitated the arbitration proceedings”—meant only the party who formally invoked arbitration. Prima facie, the Bench read those words as referring to the party whose conduct made arbitration necessary. Since the petitioners alleged that respondent No.17’s conduct, including the 26 May 2026 termination communication, had necessitated arbitration, and the petitioners carried on business from Mumbai, the Bench held that Bombay High Court prima facie had territorial jurisdiction.
The Bench also held that the petitioners had established a strong prima facie case, that the balance of convenience was in their favour because disruption of a business carried on under the “Vadilal” brand for over thirty-three years could cause irreversible damage, and that irreparable injury was made out because loss of goodwill, market identity and the benefit of rights claimed under the family settlement could not be adequately compensated in money.
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Briefly, the petitioners claimed that under a family settlement dated 30 March 1993, recorded in a Memorandum of Agreement, the Bombay Group received exclusive rights to manufacture and sell ice cream and certain other products under the “Vadilal” brand in specified territories including Maharashtra, Goa, Karnataka, Kerala and Andhra Pradesh/Telangana. They said that this family settlement was implemented through four contemporaneous documents executed on the same day: the Parent Agreement, the Branding Agreement, the Irrevocable Power of Attorney and the Registered User Agreement. According to them, these documents together gave them permanent and irrevocable rights to use the “Vadilal” brand in their territories, in consideration of their surrender of shareholding and management rights in the family business.
The dispute arose after respondent No.17 issued a communication dated 26 May 2026 purporting to terminate the Registered User Agreement and revoke the Irrevocable Power of Attorney, and then sought to prevent the petitioners from continuing to use the “Vadilal” brand. The petitioners argued that the respondents were wrongly treating the Registered User Agreement as the sole source of their rights, whereas their rights actually arose from the larger family settlement and the connected agreements had to be read together. The respondents, on the other hand, argued that the four agreements were separate contracts, that the Registered User Agreement was the operative and controlling document governing trademark use, that it had been validly terminated for alleged quality breaches, and that disputes concerning it were subject to the jurisdiction of the Ahmedabad courts rather than arbitration under the Parent Agreement.
