Top Story


Home >> Marketing >> Article

Madras HC asks LG Care to stick to contract with Indian licensee

Font Size   16
Madras HC asks LG Care to stick to contract with Indian licensee

The Madras High Court, in an interim order, has allowed India Household and Healthcare (IHHL) to start manufacturing LG Care's FMCG products in small pack sizes with the LG's Logo, citing a violation of the Indian Contracts Act by the Korean major.

LG Care, which is in the FMCG category in over 40 countries, made its entry into India through its sole licensee IHHL in April 2004. IHHL did not manufacture LG products for the Indian market, but resold the FMCG goods in multiple categories including soaps and toothpastes imported from Korea.

According to IHHL, the parent company raised an issue over the usage of the LG's logo in India last year, and shipments stopped arriving in India in October 2004. In February 2005, LG Care faxed a letter to IHHL stating that the contract was signed by 'working-level officers' and was therefore unacceptable.

IHHL had alleged that the LG Group's intention was 'malafide', and that it was arbitrarily seeking to dissociate from the Indian partner after making inroads through the Indian partner to exploit the FMCG market on their own. The court ruling was in response to this argument.

In a press conference convened at the Madras High Court premises on Wednesday afternoon, Nalini Chidambaram, Senior Counsel to IHHL, said that the LG Group had misinterpreted the removal of Press Note 18 by the Indian Government.

"They seem to be under the mistaken impression that they are at liberty to renege on even existing JV commitments. That is why within days of scrapping of press note 18 they chose to unilaterally and arbitrarily terminate the contract with the Indian partner", she said.

Stating that according to preliminary estimates, IHHL's losses are around Rs 500 crore, R Venkatesh, Corporate & Legal Advisor, IHHL, said, "We have lined up the manufacturing over the last few months. We are ready to start it at the earliest."

However, IHHL can now manufacture small pack sizes of LG Care products and market them with the LG Logo, as per the contract entered into by both parties initially.


Kranti Gada joined the family business at Shemaroo in 2006 after a successful stint of over two years in marketing at Pepsi Co. She has been associated with the company for 12 years.

Exchange4media interacted with Jaspreet Chandok, Vice President and Head (Fashion) , IMG Reliance Pvt. Ltd on seamless brands integrations planned for Lakme Fashion Week, walking tall despite blazing trails like GST, demonetization and being a part of the larger cultural space

Their strategy to educate the consumers to make well informed decisions at all stages has worked out well.

Bobby Pawar, MD, CCO - South Asia, Publicis India, talks about his idea of chilling out

For their latest campaign ‘Peeoge toh Janoge’ (English translation: you’ll buy it if you taste it), Wagh Bakri and DDB Mudra gave Sakshi a new, rustic avatar.

Dabbawalas send some extra love along with dabbas to working professional across Mumbai

The Diamond Producers Association brings to life another rare moment as part of the ‘Real is Rare. Real is a Diamond' Campaign