Anil Ambani group moves NCLT to restrain IIHL from using Reliance brand name

Anil Dhirubhai Ambani Ventures Pvt Ltd (ADAVPL), a Reliance Group company, has filed an interim application in the NCLT, seeking direction to successful resolution applicant of the Reliance Capital – IndusInd International Holdings Ltd — to stop using the ‘Reliance’ brand name as soon as the resolution plan is implemented, news agency PTI reported.

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 Reliance Capital 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, which is currently under the insolvency resolution process, entered into a brand licensing agreement on April 1, 2014.

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

The NCLT, on February 27, 2024, approved IIHL’s Rs 9,650-cr resolution plan for Reliance Capital.

In November 2021, the Reserve Bank superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.

The central bank appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company.

Reliance Capital had a debt of over Rs 40,000 crore, and four applicants had initially bid with resolution plans. However, the committee of creditors rejected all four plans for lower bid values, and a challenge mechanism was initiated in which IIHL and Torrent Investments participated.

Also See: Expedite approvals for implementation Reliance Capital resolution plan: NCLT to regulators