The Madras High Court has restrained TTK-LIG Ltd, a joint venture between India’s TTK Group and the UK-based Reckitt Benckiser Group Plc, from selling contraceptives overseas to any company but the joint venture partner.
The court order is the latest development in the ongoing legal battle between the TTK group and Reckitt Benckiser on the manufacturing and sales rights of condoms produced under the ‘Durex’ brand.
The order comes in response to a petition filed by New Bridge Holdings, the company that represents Reckitt at TTK-LIG and London International Group (LIG), the parent of New Bridge. The petitioners asked the Madras High Court to grant an ad-interim injunction, restraining TTK-LIG and its Managing Director, along with T T Jagannathan, chairman of TTK Healthcare Ltd, and other seven people from entering any agreement for sale or supply of contraceptives manufactured by TTK-LIG.
| TIMELINE |
| * The JV was started as London Rubber Co (India) in 1963, in collaboration with LRC Products UK, which held 60 per cent stake |
| * In 1971, TTK took charge of the business. In 1990, the foreign partner came to be known as LIG |
| * In March, 2011, shares of LIG in TTK-LIG were transferred in favour of New Bridge Holdings BV |
| * Later, Reckitt moved the Company Law Board, complaining against the Indian partner. It filed a complaint alleging TTK of planning to sell the products to third parties in January 2012. It is on this case that the two new interim orders came |
“The company and any of its directors, employees..., agents or any other person claiming through or under them be and are hereby restrained by an order of interim injunction till the disposal of the suit from executing any agreement and/or entering into any arrangement for sale/supply of contraceptives and other products (manufactured by the company) to third parties, other than the plaintiffs,” the court said in its order on Monday.
The order, a copy of which is available with Business Standard, was given by Justice R Subbiah.
When contacted, Jagannathan refused to comment on the issue, stating that the matter was sub-judice.
TTK-LIG moved a division bench of the high court, challenging Justice Subbiah’s order. Hearing the appeal, the division bench on Tuesday clarified that the company’s could sell contraceptives in the domestic market.
Amar Gupta from J Sagar Associates, co-counsel with PRA Law that is advising the JV's foreign partner, has confirmed on Tuesday's order but declined to comment further as the matter is sub-judice.
In their petition, New Bridge and LIG alleged that TTK-LIG, at the instance of the TTK group, had started negotiations with some foreign buyers, including Church and Dwight Co, Australian Therapeutic Supplies, Four Seasons Lab. and Four Seasons Laboratories, for the export of condoms.
New Bridge Holdings argued the foreign buyers were its trade rivals, and finalising the foreign buyers would amount to disclosure of proprietary technology and confidential information provided by the applicants to the JV company.
New Bridge Holdings holds 49.87 per cent stake in TTK- LIG, while the TTK group promoters hold 49.87 per cent. The firm was set up in 1963.
On its part, TTK argued there was no restrictive covenant in any of the agreements that precluded the company from manufacturing products for other brands or selling its brands to customers other than the partners.
