Reliance Group vs. IIHL: NCLT Restraint on Brand Name Use

Mumbai, Aug 19 (PTI) Anil Dhirubhai Ambani Ventures Pvt Ltd (ADAVPL), a Reliance Group company, has filed an interim application in the NCLT, seeking direction to the Reliance Capital's successful resolution applicant IIHL to stop using the 'Reliance' brand name as soon as the resolution plan is implemented.

The NCLT, while approving the IIHL's resolution plan on February 27, had allowed the company to use the Reliance brand for three years from the date of approval of the plan to implement the resolution plan transaction.

ADAVPL, in its application, has argued that the Brand Agreement does not create any interest in the brand in favour of RCAP but only allows permissive use thereof.

Given this position, the brand is not an "asset" of RCAP within the meaning of the term as used in Section 18 of the Insolvency and Bankruptcy Code, and ADAVPL has requested the cessation of brand usage by IIHL immediately after implementation of the resolution plan.

According to sources close to the development, the brand Reliance is 50:50 jointly owned by Mukesh Ambani and Anil Ambani, and the same can not be allowed to be used by any other company or individual.

Moreover, the Hindujas have completed the registration of their brand for the RCAP companies in Mauritius.

ADAVPL, in its application, has also argued that the company was not heard while allowing the IIHL to use the brand for 3 years, as it was not a party to the resolution plan.

The ADAVPL application stated that Anil Dhirubhai Ambani Ventures Private Limited (ADAVPL) and Reliance Capital (RCAP), which is currently under the insolvency resolution process, entered into a brand licensing agreement on April 1, 2014.

Under the agreement, ADAVPL granted RCAP a non-exclusive, royalty-free license to use the brand for 10 years, which has also expired.