Pepsi approaches NCLAT for release of its machinery from Oceanic Tropical

Company had supplied machine for producing juice, Mirinda cups to Oceanic Tropical, which is undergoing liquidation

Global beverages giant PepsiCo’s Indian arm PepsiCo India Holding Private Limited has approached the National Company Law Appellate Tribunal (NCLAT) seeking release of its machinery from the liquidator of Oceanic Tropical Fruits Private Limited.

PepsiCo has claimed that the machine it supplied to Oceanic Tropical was for making juices and Mirinda cups. Oceanic Tropical, however, is now undergoing liquidation and the machine now rightfully belongs to it, the latter has claimed. Though the NCLAT has agreed to hear PepsiCo, it has also asked the company as to why it should not be kept at the premises of Oceanic Tropical with the same terms and conditions that PepsiCo had with the former. The NCLAT has said that the machines supplied by PepsiCo are necessary to maintain Oceanic Tropical’s status as going concern.

“While we issue notice to the liquidator but also ask the appellant to state that even if we decide that the machinery belongs to it, why it be not allowed to be kept with the liquidator for keeping the company a going concern with same terms and conditions as it had with corporate debtor (Oceanic Tropical),” a three-member Bench led by Chairperson Justice S J Mukhopadhaya has said. The NCLAT will next hear the PepsiCo on August 7.

Earlier, the Chennai bench of National Company Law Tribunal (NCLT) had declared that the termination of agreement between PepsiCo India and its bottling firm Oceanic Tropical Fruits was null and void. This would enable the liquidator to keep Oceanic Tropical a going concern, the NCLT had then said.

PepsiCo India had in 2011 signed an agreement with Oceanic Tropical according to which the latter would manufacture, process and package mango-based drink Slice for the former. The agreement was for a period of 10 years. However, Oceanic Tropical was dragged to NCLAT by ICICI Bank over a default of Rs 100 crore.

Following the initiation of the corporate insolvency resolution process, PepsiCo terminated the agreement and sought the tribunal's permission to recover the machinery which was lying unused at Oceanic Tropical's premises. The request was, however, turned down by NCLT.