Honasa Assets Attached in Dubai Court: Litigation with RSM

New Delhi, Oct 4 (PTI) FMCG firm Honasa Consumer Ltd on Friday said a court in Dubai has ordered to attach its assets in the UAE but refused to cancel the trading license of Honasa Consumer General Trading LLC in the ongoing litigation with RSM General Trading LLC over termination of distributorship.

RSM General Trading LLC (RSM) and Honasa Consumer Ltd (Honasa) had filed grievance statements against the precautionary attachment order passed by the Court of Merits in Dubai, UAE on June 6, 2024, the company, which owns FMCG brands such as Mamaearth and The Derma Co, said in a regulatory filing.

The Dubai Court has rejected both the appeals filed by RSM and Honasa on October 1, 2024, it added.

"Dubai Court ordered to attach Honasa's assets in Dubai, UAE in view of the 25 million AED compensation (debt) ordered by Court of First Instance, Dubai," the company said, adding the court rejected the grievance statement filed by it.

At the same time, the court also rejected the grievance filed by RSM and "refused to cancel the trading license of Honasa Consumer General Trading LLC in Dubai, UAE on the grounds that Honasa Consumer General Trading LLC is a separate legal and financial entity and is not related to Honasa."

In the June 6 order, the Dubai Court had allowed to attach Honasa Consumer Ltd's assets in UAE, however, it rejected to cancel the trading license of Honasa Consumer General Trading LLC, it added.

The order came on a a precautionary attachment application filed by RSM against Honasa Consumer Ltd before the Court of Merits in Dubai, UAE for attaching assets of the company in UAE and cancellation of the trading license of Honasa Consumer General Trading LLC.

RSM General Trading LLC had filed a lawsuit in the Dubai Court for unlawful termination of its distributorship by Honasa Consumer Ltd.

Honasa said it will appeal the latest order in Dubai and will have no adverse financial impact till the finality of the appeal proceedings.

The company further said in August the Delhi High Court had ordered RSM to withdraw any execution proceeding filed in Dubai, UAE along with depositing (approximately) Rs 57 crore to the Delhi High Court registry.

"The Delhi High Court further ordered that if the execution proceedings filed by RSM in Dubai are successful, the deposited amount of Rs 57 crore shall be released to Honasa," the filing said.

It further said, "Since, RSM has not either withdrawn the execution proceedings in Dubai, UAE nor it has deposited Rs 57 crore (approximately) to the Delhi High Court registry, Honasa is in the process of filing contempt proceedings against RSM before the Delhi High Court for breach of compliance of the Delhi High Court judgment," the filing said.