Anil Ambani’s company, Anil Dhirubhai Ambani Ventures (ADAVPL), has filed a request with the National Company Law Tribunal (NCLT) in Mumbai, asking the court to order IndusInd International Holdings (IIHL), which is owned by Hinduja, to stop using the “Reliance” brand name as soon as the resolution plan for the bankrupt financial services company Reliance Capital (RCap) is put into action.
On Tuesday, the NCLT will hear the case.
The NCLT allowed the Hinduja company to use the “Reliance” name for three years following the date of approval in order to carry out the resolution plan when it approved IIHL’s resolution plan in February of this year.
In order to buy RCap, which was sent for debt resolution in December 2021 due to default on loans of Rs 25,000 crore, IIHL recently paid the lenders the whole amount of Rs 9,641 crore. After IIHL emerged victorious in the RCap auction, lenders accepted IIHL’s offer in June 2023.
The Ambani family agreement states that billionaire Mukesh Ambani, chairman of Reliance Industries, and his younger sibling, Anil Ambani, possess an equal share of the “Reliance” brand. It’s interesting to note that Jio Financial Services, controlled by Mukesh Ambani, is growing in India. According to the petition, only the Ambani brothers and their company should be able to use the “Reliance” trademark.
In its application, ADAVPL argues that RCap is only granted permission to use the brand, not a stake in it. Because of this, the brand is not regarded as a “asset” of RCap under Section 18 of the Insolvency and Bankruptcy Code, and ADAVPL has asked that IIHL immediately stop using the brand after the resolution plan is put into effect.
Additionally, ADAVPL claims that because it was not a party to the resolution plan, it was not heard prior to IIHL being given permission to use the mark for three years.
The application states that in April 2014, RCap and ADAVPL signed a brand license agreement. RCap is presently going through the insolvency resolution process. ADAVPL gave RCap a non-exclusive, royalty-free permission to use the brand for ten years, however that licence has since expired.
The petition is a result of the NCLT’s February ruling granting RCap a three-year licence to use the “Reliance” trademark.
Brand is important.
> In order to purchase RCap, IIHL recently paid lenders Rs 9,641 cr.
> For three years, IIHL was permitted to utilise the brand by NCLT.
> According to the IBC, the company led by Anil Ambani claims that the Reliance brand is not a “asset” of RCap.
> ADAVPL claims that although permitting the usage, it was not heard.
NCLT will hear the case today.