Litigation Update

Honasa Consumer Receives Favourable Rectification Order in Arbitration Against RSMM General Trading LLC

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Honasa Consumer Limited has received a favourable rectification order under Section 33 of the Arbitration and Conciliation Act, 1996. The Arbitral Tribunal corrected computational and clerical errors in its earlier award, increasing damages awarded for loss of profits and reaffirming multiple monetary and declaratory reliefs in favour of the company.

PRICE-SENSITIVE TRIGGER

Event: Favourable rectification order in arbitration proceedings.

Type: Litigation Update

Impact: Positive

Immediate Effect: The Arbitral Tribunal has revised the earlier arbitration award by correcting computational errors, increasing the compensation payable to Honasa Consumer and strengthening the enforceability of the final award against RSMM General Trading LLC.

HIghlight:

Loss of Profits Award: Revised to AED 7.32 million (from AED 4.34 million)
Costs for Dubai & Allied Proceedings: AED 1,559,848
Substitution Costs: AED 744,758 (corrected from AED 1,060,584 recorded in the original award)
Arbitration Costs (India): INR 76,50,875
Post-Award Interest: AED components to carry EIBOR + 2% p.a. after 30 days if unpaid; INR component to carry SBI Prime Lending Rate (PLR) + 2% p.a.
The Tribunal enhanced the loss-of-profits compensation to AED 7.32 million while preserving multiple monetary and declaratory reliefs awarded in favour of Honasa Consumer.

What Happened ?

Honasa Consumer Limited informed the stock exchanges that the Arbitral Tribunal has passed a favourable order dated 26 June 2026 under Section 33 of the Arbitration and Conciliation Act, 1996.

The company had filed an application seeking correction of computational and clerical errors in the final arbitration award dated 14 May 2026. The Tribunal accepted the application, corrected the identified errors and incorporated the revised figures into the final award.

Apart from revising monetary compensation, the Tribunal reaffirmed several declaratory and injunctive reliefs against RSMM General Trading LLC relating to disputes arising under the Authorized Distributor Agreement (ADA).

Key Details

Section 33 Rectification Order:

The Tribunal allowed Honasa Consumer’s Section 33 application seeking correction of computational and typographical errors.
Damages for loss of profits were revised upward from AED 4.34 million to AED 7.32 million.
Substitution costs were corrected to AED 744,758 in line with the company’s Statement of Claim.
RSMM has been restrained through a permanent prohibitory injunction from initiating or continuing proceedings before Dubai courts in breach of the arbitration agreement and exclusive jurisdiction clauses.
The Tribunal directed RSMM to indemnify the company against amounts recoverable pursuant to Dubai court proceedings relating to termination of the Authorized Distributor Agreement.
The company was awarded:
- AED 1,559,848 towards costs incurred in Dubai and allied Indian proceedings.
- AED 744,758 towards substitution costs.
- AED 7.32 million towards loss of profits.
- INR 76,50,875 towards arbitration costs.
If the awarded sums remain unpaid after 30 days, post-award interest will accrue on both AED and INR components at the prescribed rates.

Note:

The Tribunal confirmed that the corrections fall within the scope of Section 33 and form an integral part of the final arbitration award dated 14 May 2026.

Risk Analysis

Summary:

While the rectification order significantly strengthens Honasa Consumer’s legal position, actual recovery of awarded amounts remains subject to enforcement and payment by the respondent.

Key Points:

Enforcement proceedings may be required if the respondent does not voluntarily comply.
Cross-border recovery may involve additional legal procedures.
Interest protection has been incorporated in case of delayed payment.
The order strengthens the company’s legal standing in ongoing and related proceedings.

Worst Case:

Delayed enforcement or further legal challenges could postpone realization of awarded damages despite the favourable arbitration outcome.

Risk Level: Medium

Company Commentary

The Arbitral Tribunal allowed the company’s Section 33 application and corrected computational and clerical errors in the original award.
The revised award increases compensation for loss of profits and confirms multiple declaratory and monetary reliefs.
The company has disclosed the development in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The disclosure will also be hosted on the company’s website.

Official Exchange Filing: Honasa Consumer Limited

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