Simultaneous execution of family settlement documents creates a composite arrangement governing arbitration and territorial jurisdiction.

The Petitioners (Bombay Group) and Respondents (Ahmedabad Group) are members of the Gandhi family who divided the "Vadilal" business via a family settlement on March 30, 1993

This settlement was recorded in a Memorandum of Agreement ("Parent Agreement") and implemented through three simultaneous documents: a Branding Agreement, an Irrevocable Power of Attorney, and a Registered User Agreement (RUA)

For 33 years, the Petitioners exclusively used the "Vadilal" brand in specific territories (Maharashtra, Goa, etc.)

In May 2026, Respondent No. 17 purported to terminate the RUA and Power of Attorney, alleging quality control breaches based on laboratory reports, and denied the Petitioners' rights to the brand

The Petitioners sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, asserting that the RUA is inseparable from the Parent Agreement which contains an arbitration clause (Clause 10.1)

1. Whether the Memorandum of Agreement (Parent Agreement) is the primary document governing the family settlement and whether the supplementary agreements form part of a composite transaction

2. Whether the arbitration clause in the Parent Agreement extends to disputes arising from the supplementary agreements despite the absence of such clauses in the latter

3. Whether the Bombay High Court has territorial jurisdiction based on the "necessity" of arbitration under Clause 10.1

4. Whether the Petitioners are entitled to interim protection against the termination of the brand rights

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996 regarding interim measures

The Court relied on the "Group of Companies" doctrine and the principle of consent from Cox Kings v. SAP India

Principle of composite transactions from ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji

The Court distinguished M.R. Engineers Contractors (P) Ltd. v. Som Datt Builders Ltd. and Duro Felguera, S.A. v. Gangavaram Port Ltd., which mandate strict incorporation by reference for commercial contracts, noting that family settlements deserve a more liberal, holistic construction to maintain harmony as per Kale v. Dy. Director of Consolidation

The Court also interpreted Clause 10.1 of the Parent Agreement regarding territorial jurisdiction based on whose conduct "necessitated" arbitration

The Court found prima facie that the four agreements executed on the same day were not independent commercial contracts but an integrated family arrangement intended to permanently distribute rights

Although Respondent Nos. 17 and 18 were not signatories to the Parent Agreement, their active role in implementing and terminating the rights brought them within the scope of the arbitration agreement under the "Group of Companies" and composite transaction doctrines

On jurisdiction, the Court rejected the Respondents' narrow reading of Clause 10.1, holding "necessitated" refers to the party whose conduct (termination) triggered the dispute, thereby vesting jurisdiction in Mumbai where the Petitioners are situated

Regarding the RUA termination, the Court reasoned that the right to the brand was part of the consideration for surrendering family shareholding, making it more than a simple commercial licence

Due to the 33-year uninterrupted user and the disputed nature of the laboratory reports, the balance of convenience favoured preserving the status quo to prevent irreparable loss of goodwill

The Court partly allowed the petition and granted a restrictive interim injunction restraining Respondents from acting on the termination notice dated May 26, 2026, and from interfering with the Petitioners' use of the "Vadilal" brand, subject to compliance with the Food Safety and Standards Act, 2006 and reasonable inspection

The order remains in force until 90 days after the arbitral award or until modified by the Arbitral Tribunal