The Madras high court has restrained LG Household and Healthcare by an interim injunction from importing, manufacturing, marketing and selling its FMCG products with the LG logo in India.
The interim injunction follows an application filed by the India Household Health Care to counter the termination of an agreement signed with LGHLL on May 8, 2004.
The agreement had authorised IHHCL as the sole licencee for its FMCG products in India. The products include soaps, shampoos, toothpastes, detergents, diapers, home cleaners, hair styling products, laundry products, home care products and kiss products.
Nalini Chidambaram, senior counsel of IHHL, in a press release said, "The impediment created by the LG Group, Korea, for the Indian partner on use of LG logo will not stand in a court of law.
"Normally, group companies in Korea enter into a Trademark Administration Agreement, whereby assignment of trademark is a subject matter of agreement within the group companies.
"In this case, LG Corporation, the holding company would have been assigned the right to use LG logo formally to all their sister concerns.
"Suppressing this fact, LG group of companies are falsely claiming that there is an issue around the use of the LG logo, when actually there is no such issue."
The interim injunction further states that LGHLL is restrained from interfering with the manufacturing of the said FMCG products by IHHCL, directly or through third party manufacturers in India appointed by IHHCL.
The injunction also restrains LGHLL from interfering with marketing and selling of shampoos, detergents, toothpaste and soaps with the LG logo as "per sizes and quantities agreed in the minutes of the meeting dated May 8, 2004 read with the licence agreement."
IHHL has been given the go-ahead by the Madras high court to manufacture these products in small packs with LG logo in India, pending arbitration.
According to a IHHL release, LG Group, Korea, had arbitrarily decided to dissociate from the company citing an untenable issue around the LG logo.
LG Corporation had also supposedly terminated the agreement as they considered the agreement to have been finalised by working level employees from LGHLL with IHHL.
"It is also ironical that LG Group, Korea should describe come of the senior most officials worldwide as working level employees, just for the sake of terminating the contract with the Indian partner," said Chidambaram.
These 'working level employees' of LG include Y C Choi, global VP, C H Kim, VP-overseas, H K Park, team leader-global marketing team and B K Jung, general manager of the overseas sales team. These employees had been part of the various contracts, review meetings and press meets between LGHHL and IHHL.
IHHL will now continue with arbitration proceedings against LGHHL for compensation of the loss it is said to have suffered in making the investments required to make LG Care a 'household' brand name. IHHL roughly estimates this loss to be around Rs 500 crore (Rs 5 billion)
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