Coca-Cola Refutes Pepsico Charges In Court

Coca-Cola India has refuted the allegations made by PepsiCo India in its petition filed in the Delhi High Court. Coca-Cola is charged with inducing the petitioners key employees and associates to break their contracts with the intention to disrupt its operations.

In its preliminary reply to the charges, Coca-Cola has gone one step ahead and levelled some charges against Pepsi, referring to advertisements that seek to ridicule or otherwise belittle the advertisement campaign of Coca-Cola.

In the preliminary reply, submitted on Tuesday evening, Coca-Cola has pleaded against any interim relief as requested by Pepsi. A detailed reply will be filed later.

 

Justice D K Jain, who heard the case yesterday, adjourned it to May 25. He said the court could not appreciate the respondents stand unless it had taken a good look at the reply filed on record.

At yesterdays hearing, Pepsis counsels K K Venugopal and Arun Jetley expressed eagerness to proceed with the hearing, citing urgency. We are under threat, they said. Venugopal informed the court that another person had crossed over to Coca-Cola since the last hearing on May 6.

Coca-Cola counsels Pallavi Shroff, Harish Salve and Dushyant Dave sought time to submit a detailed reply by all the respondents.

The allegations pertain to 1996-97 and we are now in 1998. Please give us at least a week more, said the counsel.

Pepsis petition, invoking the Law of Torts, had cited incidents of its employees, independent bottlers, business consultants, distributors and institutional clients being offered inducements by Coca-Cola in the form of remuneration much higher than the prevailing industry average.

According to Coca-Colas reply, the allegations by Pepsi amount to economic torts. Under the law, says the reply, Pepsi must prove the existence of a contract, knowledge of the contract by the third party procuring the breach, actual breach of the contract and that the breach resulted directly from a wrongful act of Coca-Cola. Further, the reply says Pepsi must also prove that it has suffered actual damage as a result of the alleged actions of Coca-Cola.

In a world where free competition is permissible, lawful steps to advance ones own business may, to some extent, affect the business of others, Coca-Cola has said, adding that such steps are not a questionable business practice. Acts done to further ones own business interest, which are not otherwise unlawful, can never constitute a tort. Recruitment of employees in the course of expansion of a business can never constitute a tort.

Coca-Cola says Pepsi has not been able to establish that its employees have been recruited by Coca-Cola with the sole intention of causing injury to the plaintiffs.

Denying having offered any inducement to Pepsis employees, Coca-Cola says the employees who have joined it have been fitted in the normal grades and offered remuneration packages of the grade employed in.

Stating that damage is an essential element of tort, Coca-Cola has pointed out that Pepsi has not given the material particulars of the damage caused by the alleged acts on each occasion.

The reply also says that Pepsis complaint has not been instituted, signed and verified by an authorised person.

Besides, Coca-Cola has said that it is Pepsico which is guilty of having lured away or induced Coca-Colas employees and business associates not only in India but also overseas.

Coca-Cola has further said that Pepsi has at all times engaged in aggressive marketing and a policy of direct confrontation with their primary competitor and thus can ill-afford to complain now of migration of its employees...

In this respect, Coca-Cola has referred to advertisements by Pepsico which basically seek to ridicule or otherwise belittle the advertisement campaign of the defendants.