The Bombay High Court has granted interim relief to the "Bombay Group" of the Vadilal ice-cream business in a dispute over the use of the 'Vadilal' brand name, holding that its claimed rights are prima facie rooted in a 1993 family settlement rather than a commercial licence capable of being terminated unilaterally.

Justice Amit Borkar passed the order on a petition filed by Shailesh Gandhi, Bela Gandhi, and Vadilal Dairy International Ltd. under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection pending arbitration.

The petitioners contended that they enjoy permanent and irrevocable rights to manufacture and market ice cream and juices under the 'Vadilal' brand in Maharashtra, Goa, Karnataka, Kerala and the undivided Andhra Pradesh (including present-day Telangana), pursuant to a family settlement entered into between the Bombay and Ahmedabad branches of the Gandhi family in 1993.

The dispute arose after Vadilal International Pvt. Ltd., which belongs to the Ahmedabad Group, issued a communication in May 2026 terminating the registered user agreement and revoking an irrevocable power of attorney, thereby asserting that the Bombay Group no longer had any right to use the Vadilal trademark.

Examining the material on record, the High Court noted that four documents were executed on March 30, 1993—a memorandum of agreement described as the parent agreement, a branding agreement, an irrevocable power of attorney and a registered user agreement.

Justice Borkar observed that these documents prima facie formed an integrated family arrangement governing the separation of businesses, transfer of shareholding, territorial division and continued use of the Vadilal brand.

"This shows that the Registered User Agreement was not an ordinary commercial licence but was a part of the family settlement under which the Bombay Group received permanent and irrevocable rights in the 'Vadilal' brand after giving up its shareholding and management rights in the Vadilal International," the Court observed.

The Court further held, on a prima facie assessment, that the parent agreement functioned as the umbrella document, with the remaining agreements implementing the broader family settlement.

It also noted that the arbitration clause contained in the parent agreement was broad enough to extend to disputes arising under the subsequent agreements.

The Court observed that Vadilal International Pvt. Ltd. and Vadilal Industries Ltd., both belonging to the Ahmedabad Group, had acted in accordance with the family settlement for several decades. Questions relating to their respective roles and the impact of a proposed merger, the Court said, would be best left for determination by the arbitral tribunal.

Opposing the petition, Vadilal International argued that once the registered user agreement had been terminated, no legal relationship survived between the parties. It contended that permitting continued use of the trademark would effectively amount to restoring a terminated contract through a mandatory injunction.

The Bombay Group, however, argued that its rights did not originate solely from the registered user agreement but flowed from the parent agreement and branding agreement, with the registered user agreement and power of attorney merely operationalising those rights.

Accepting this prima facie distinction, the Court held that the petition sought preservation of disputed rights arising out of the family settlement pending arbitration, rather than revival of a terminated commercial licence.

Accordingly, the Court restrained the Ahmedabad Group from giving effect to its May 26 termination letter.

The High Court also restrained the Ahmedabad Group from using the 'Vadilal' brand within the territories claimed by the Bombay Group and from transferring, licensing or creating third-party rights in the disputed trademark or related rights.

The interim order will remain in force during the arbitral proceedings and for 90 days after the arbitral award, or until modified by the arbitral tribunal, whichever is earlier.