Honasa Vs Distributor: D2C Brand Says It Has No Assets In UAE

Honasa Consumer has clarified that it does not own any asset in the UAE, a day after the Dubai court upheld its previous order directing attaching assets of the Mamaearth’s parent in the region.

In an exchange filing today (October 5), Honasa Consumer also pointed out that its Dubai subsidiary has been exempted from the attachment order. 

This comes a day after Honasa said that the Court of Merits at Dubai rejected the grievance filed by Honasa and its former distributor RSM General Trading. 

These grievances included RSM General Trading’s demand to cancel the trading licence of Honasa’s subsidiary and Honasa’s objection to the attachment of its assets in UAE. 

The Dubai court’s initial ruling came on June 6 and both parties filed their appeals against the order.

The D2C brand’s parent reiterated today that it will file contempt against RSM in Delhi court for non compliance with the Delhi HC’s order of August. 

For the uninitiated, the Delhi HC’s order in August not only asked RSM General Trading to revoke its execution proceedings in Dubai against Honasa but also deposit INR 57.17 Cr along with added interest in the registry of Delhi HC until the withdrawal of execution proceedings in Dubai against Honasa. 

The order then pointed out that if the Dubai court still enforces the order against Honasa, the Delhi High Court will release the money to the D2C brand.

At the heart of this fiasco is Honasa severing its ties with RSM General Trading, with the latter alleging Honasa of abruptly terminating the distributorship agreement.

RSM General Trading was Honasa’s distributor in the Middle East and African region between July 30, 2020 and January 17, 2023.

Earlier, in May UAE’s Court of full Commercial Jurisdiction ordered Honasa to pay a compensation of AED 25.07 (around INR 57 Cr) Mn as damages to RSM General Trading. 

Apart from this, it also directed the company to pay legal interest at a rate of 5% (from the date the judgement becomes final until full payment is made) and AED 1,000 (INR 22,665) as attorney fees. 

Founded in 2016 by the husband-wife duo Varun and Ghazal Alagh, Honasa’s product portfolio comprises six beauty and personal care brands which include Mamaearth, The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s.