Even as the textile-to-airline Wadia group and French dairy major Groupe Danone try to settle their differences on joint venture agreements, the legal battle between them in the Avesthagen case shows no signs of abating.
The next hearing has been scheduled for March 20 amidst talks that the partners may opt for an out-of-court settlement.
Wadia group chairman Nusli Wadia is believed to have met Danone executives in France in the end of last month in an attempt to sort out issues related to Wadia-BSN (the former name of Danone), a joint venture company where both parties have an equal stake.
Wadia-BSN was set up in 1995 to explore opportunities in the food business in India, which failed to take off. In late 2006, Kalabakam Investments, a Wadia group company, filed a case against Danone to stall its investment in Bangalore-based bio-nutritional company Avestha Gengraine Technologies (Avesthagen) on the grounds that it violated the joint venture agreement.
As per the agreement, if either partner spotted an opportunity in the food and beverages space in India, it had to be first presented to Wadia-BSN.
If either partner was unwilling to invest in the company, then the other was free to do so independently, provided it did not harm the existing activities of the business.
The Wadia group has contested Danone's $5 million investment in Avesthagen saying that while they were willing to invest in the company, the Danone representative had voted against Wadia-BSN investing in Avesthagen. But, Danone itself invested in Avesthagen through daninvest.com, its wholly-owned subsidiary.
While at the initial hearing in December the Bombay High Court passed a restraining order on the Avesthagen shares, the subsequent hearings have been postponed so far.
The dispute between the two partners came to the fore when biscuits major Britannia declined to share its financial performance with Danone, the majority shareholder in the company along with the Wadia group.
The company said that it would release the information to Associated Biscuits International Holdings (ABIH) in which Danone and the Wadia's have an almost equal stake and which is a shareholder in Britannia.
The matter then spilt over to copyright issues over Tiger biscuits, a brand that has been created locally by Britannia and is now marketed across several countries by Danone.
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