In a significant ruling for Honasa Consumer, the Dubai Appeal Court has dismissed precautionary appeals from the beauty and personal care products firm and its former distributor, RSM General, pertaining to the ongoing distributorship termination issue. RSM General, which previously distributed Mamaearth products across the MENA region, initiated litigation against Honasa in July last year, claiming unlawful termination of its distributorship.
In June of this year, the court declined to revoke the trading licence of Honasa’s Dubai entity, Honasa Consumer General Trading. The court also mandated that the parent company of Mamaearth attach the UAE assets of the company, as indicated in an exchange filing.
However, the filing stated, “This Order remains unenforceable as the Hon’ble Delhi High Court instructed RSM to submit a request to the Appeal Court for the suspension of the precautionary attachment proceedings. The Appeal Court, upon RSM’s request, has suspended the precautionary attachment proceedings.”
The company further clarified, “There will be no significant financial impact on Honasa due to the Delhi High Court Order, as Honasa Consumer possesses no assets in the UAE.”
On Monday afternoon, shares of Honasa Consumer traded at Rs 255.75 each on the NSE, marking a 1.5% decline.
Also Read
Explained: How Distribution Issues and Inventory Adjustments Impact Mamaearth Stocks
This development follows an order issued by the Delhi High Court under Section 9 aimed at safeguarding Honasa Consumer, which includes an injunction prohibiting RSM from enforcing the Dubai Court judgment. Following RSM’s appeal against this decision, the Delhi High Court instructed RSM to ask the Appeal Court in Dubai to suspend the ruling from the Dubai Court. Furthermore, it mandated that RSM refrains from executing the Dubai judgment within the UAE or any other jurisdiction until the resolution of the Indian appeal.
Honasa has also appealed the initial ruling from the Dubai Court to the Cassation Court. While this appeal is pending, RSM is barred from undertaking any execution actions against Honasa in the UAE.
(The copy was updated with additional information.)
