The Dubai court rejected appeals from both Honasa Consumer and its former distributor RSM General Trading. It upheld the initial judgement from May 16, 2024, which ordered Honasa to pay AED 25.07 million (around INR 57 crore) in damages to RSM for the alleged wrongful termination of their distributorship agreement.
Dubai court rules to attach Honasa’s assets in UAE
According to INC42, after the May ruling, the Dubai court ordered Honasa’s assets in the UAE to be attached as part of the judgement enforcement. This order was confirmed again on October 5. Honasa later clarified that it doesn’t own any assets in the UAE.
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Following the recent judgement on October 15, Honasa stated in an exchange filing: “the Court of Merits at Dubai on October 1 rejected the grievance filed by both the parties, including RSM General Trading’s demand to cancel the trading licence of Honasa’s subsidiary, Honasa Consumer General Trading LLC in Dubai.” Honasa also mentioned it will appeal against the Dubai Court’s judgement within 30 days before Dubai’s Supreme Court (Cassation Court).
Honasa initiates contempt case against RSM General Trading in Delhi HC
Furthermore, It stated that the AED 1000 appeal costs are not final until Dubai’s Supreme Court gives its judgement. This isn’t the first time the Dubai court upheld its previous judgement. Earlier this month, the court confirmed its order to attach the parent company’s assets. The dispute between both parties has taken several turns, and court decisions in India and Dubai seem to contradict each other.
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In the beginning of this month, Honasa mentioned in its filing that it is starting contempt proceedings against RSM General Trading in the Delhi High Court for not following the court’s order. The Delhi HC’s August order required RSM to stop its execution proceedings in Dubai against Honasa and deposit INR 57.17 crore plus interest with the Delhi HC until the proceedings in Dubai are withdrawn.
Notably, the order stated that if the Dubai court enforces the ruling against Honasa, the Delhi High Court will give the money to the D2C brand.
Established in 2016 by husband-wife duo Varun and Ghazal Alagh, Honasa’s product lineup includes six beauty and personal care brands: Mamaearth, The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr. Sheth’s.
Financially, the D2C company saw a 62.9% increase in profit after tax (PAT), reaching INR 40.2 crore in Q1 FY25, up from INR 24.7 crore in the same quarter last year, thanks to higher beauty product sales. Operating revenue grew 19.3% year-on-year and 17.3% from the previous quarter to INR 554 crore.
On Friday, Honasa’s shares closed at INR 422.25 on the BSE, down 0.48% from the previous day.
