Court to hear Wadia, Groupe Danone dispute over JV
By PTI |
Highlights
MUMBAI: The Bombay High Court will hear the Wadia Group's dispute over a joint venture with France's Groupe Danone in due course of time.
The matter was earlier being heard by a division bench of Justices R M Lodha and S A Bobde, who had restrained Groupe Danone from "creating third party interest" in the five per cent stake that it picked up in another Indian company, Avestha Gengraine.
The earlier order implied that Danone could not sell or transfer its shares of Avestha till Janury 10. With judges to hear the case yet to be appointed following Lodha's transfer to the Rajasthan High Court, status quo shall be maintained in the matter.
Danone had formed a joint venture with the Wadia Group in 1994 called Wadia BSN Ltd. According to the agreement between the Wadias and Danone, if either party wanted to invest independently in any "business opportunity" in India, it would first place the proposal before the Wadia BSN board.
If Wadia BSN was interested in that business or investment opportunity, the partners independently could not make an investment. On the other hand, if Wadia BSN was not interested, the partners can avail of the opportunity on their own, the agreement stipulated.
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This agreement has now become a bone of contention between the two firms. In October last year, Danone put up a proposal at a board meeting of Wadia BSN that the joint venture could acquire a five per cent stake in Banglore-based Avestha. But the Wadias' case is that Danone later went back on the proposal and acquired a five per cent stake in Avestha on its own.This violates the pact between the two partners, the Wadias say, especially when the joint venture itself was interested in acquiring stake in Avestha.
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