Dubai's Appeals Court refuses to cancel trading licence for Honasa's Dubai entity
Honasa Consumer expects no material financial impact from Dubai's Appeals Court ruling, citing the Delhi High Court judgment and the absence of its assets in the UAE.
In a win for Honasa Consumer, the Dubai Appeal Court on Sunday rejected precautionary appeals from the beauty and personal care products retailer and its former distributor RSM General regarding the ongoing distributorship termination fiasco.
RSM General, a former distributor of Mamaearth products in the MENA region, had filed a litigation last July in the Dubai Court against Honasa for unlawful termination of its distributorship.
In June this year, the court refused to cancel the trading licence of Honasa’s Dubai entity, Honasa Consumer General Trading, and ordered the Mamaearth parent to attach the company's UAE assets, according to an exchange filing.
"However, this Order stands unenforceable since the Hon’ble Delhi High Court had directed RSM to file a request before the Appeal Court for suspension of the precautionary attachment proceedings. Appeal Court, upon RSM’s request, suspended the precautionary attachment proceedings," the filing read.
"There shall be no material financial impact on Honasa due to the Delhi High Court Order and, since Honasa Consumer has no assets located in UAE," the company stated in the filing.
Shares of Honasa Consumer were trading 1.5% lower at Rs 255.75 apiece on NSE on Monday noon.
The development follows the Delhi High Court granting an order under Section 9 to protect Honasa Consumer, including an injunction preventing RSM from enforcing the Dubai Court judgment.
RSM appealed this decision, following which the Delhi HC directed RSM to request the Appeal Court in Dubai to suspend the Dubai Court judgment. It also instructed RSM not to enforce the Dubai judgment in the UAE or any other country until the Indian appeal is resolved.
Honasa has also appealed the original judgment from the Dubai Court to the Cassation Court. While this appeal is ongoing, RSM cannot start any execution proceedings against Honasa in the UAE.
(The copy was updated with additional information.)
Edited by Suman Singh
