NEW DELHI: FMCG company, Honasa Consumer Ltd, known for its brands like Mamaearth and The Derma Co, is facing a court-ordered attachment of its assets in the UAE following an ongoing legal dispute with RSM General Trading LLC.
The Dubai Court has issued this precautionary measure as part of the litigation over the termination of RSM’s distributorship agreement with Honasa.
The dispute began when RSM General Trading LLC filed a lawsuit in the Dubai Court, claiming unlawful termination of its distributorship by Honasa Consumer Ltd.
In response, both companies sought to challenge a June 6, 2024, court order that allowed the attachment of Honasa’s assets while simultaneously rejecting RSM’s request to cancel the trading license of Honasa Consumer General Trading LLC, a separate entity operating in Dubai.
Dubai Court rejects appeal
On October 1, 2024, the Dubai Court rejected the appeals from both Honasa and RSM, maintaining the attachment order. The court specified that Honasa Consumer General Trading LLC operates as an independent legal and financial entity, separate from Honasa Consumer Ltd, which influenced its decision regarding the trading license.
The Dubai Court’s order includes a compensation amount of AED25 million (approximately Rs57 crore) that was awarded to RSM. Honasa has indicated its intention to appeal this decision and asserts that the attachment will not have a negative financial impact while the appeal is pending.
Additionally, in August, the Delhi High Court had directed RSM to withdraw any execution proceedings in Dubai and to deposit approximately Rs57 crore with the court.
